The $90 Million SFX Lifeline

Author : Karen Komine
September 22, 2015

The $90 Million SFX Lifeline


SFX Entertainment, Inc. (NASDAQ: SFXE) has experienced one financially turbulent summer, starting with the flash sale of $15 million in SFX stocks in June, Beatport royalty payment delays in August, and closing out the season with a festival cancellation due to disappointing ticket sales. The flash sale was already a red flag for investors because it cried out desperation for cash, especially when SFX was valued at $1 billion not even two years prior. At that point, investors were feeling pretty uneasy about the lack of liquidity. Enter stage, the $90 million lifeline.

SFX has secured $60 million in private placement financing and refinanced $30 million in the Company’s revolving credit facility. The $60 million in private investments consists of the sale of $30 million to an unnamed institutional investor at $1.75 per share and pays a cash dividend of 9% and $30 million to the Company’s Chairman and CEO, Robert F.X. Sillerman’s private investment company. Sillerman Investment Partners will receive cash dividends in kind at 29.5% for two years and 9% thereafter.

Sillerman comments on the impact of the new financing, “While the Company continues to explore strategic alternatives, this solidifies SFX for the short and long term, so we can focus on producing great festivals and events and operating globally recognized digital properties.”

This surge of investments is undoubtedly the best news SFX has heard all summer.