LOS ANGELES (CelebrityAccess MediaWire) — Live Nation Entertainment has acquired the remaining equity stake in Front Line Management Group, Inc. that it did not previously own in a cash-and-stock deal valued at of $116.2 million. The remaining Front Line equity had been owned by the company's founder Irving Azoff and Madison Square Garden.
The cash portion of the transaction totaled $56.5 million and was funded with cash on hand. The remaining $59.7 million was paid using newly-issued shares of Live Nation common stock. Of the total shares issued, Mr. Azoff received 1.8 million shares of common stock and Madison Square Garden received 3.9 million shares of common stock.
The deal will allow Live Nation to consolidate their holdings and realize substantial savings in regards to federal income tax purposes.
"Through this transaction we will further simplify and consolidate our operating structure," said Michael Rapino, President and Chief Executive Officer of Live Nation. "By acquiring full ownership of Front Line, we expect to benefit from substantial savings related to cash taxes, the elimination of the dividend and operating synergies resulting in an increase in our free cash flow in excess of $20 million annually. Front Line is a tremendous asset and a key component of our live entertainment and marketing platform. We look forward to Irving's ongoing contributions as we continue to focus on increasing the growth potential of our combined operations."
The acquisition also heralded a shakeup for Live Nation's Board of Directors. Irving Azoff has been appointed to the position of Chairman of the Board, replacing John Malone, who is stepping down. In addition, Liberty Media CEO Greg Maffei has joined the board as Chairman of the company's newly-formed Executive Committee.
Along with Maffei comes a substantial infusion of cash from Liberty Media. The company has picked up 1.8 million shares of Live Nation common stock for $18.8 million in cash and has also agreed to purchase an additional 5.5 million shares of common stock for $57.7 million in cash, subject to approval by LN's shareholders at LN's 2011 annual stockholder meeting. – Ian Courtney