One of our biggest Canadian success stories is now pretty much in the hands of our friends south of the border.
After a successful 31-year run, Cirque du Soleil has sold the majority of its stake to a US firm.
The force behind the famed circus, now 55-year-old Guy Laliberte, has said he doesn’t believe in second-generation entrepreneurship and doesn’t want his five children to bear the pressure of operating the massive undertaking.
Plus, Laliberte has said that Cirque will have a better chance to grow internationally with the backing of well-financed corporate partners south of the border. He pointed to other Quebec-based companies like Molson Coors, Bombardier, and Garda that have large U.S. shareholders.
Laliberte will still maintain a 10 per cent stake in the Montreal-based company through his family trust and will also continue to provide strategic and creative input.
After all, he is the one who envisioned the magical, cutting edge show in the first place – one that changed the way many view the circus. Though Laliberte will remain creatively involved in the production, he has said he’ll pursue other undisclosed creative challenges as well.
In his defense, Laliberte said he only expected Cirque to last for a ten-year run in the first place. But that was long before the show exploded across the global entertainment and culture scene.
So, who are the buyers?
Equity firm TPG is acquiring a 60 per cent stake; Chinese investment firm Fosun will have a 20 per cent stake, and Quebec pension fund manager the Caisse de depot will have another 10 per cent, while existing partner, Dubai World, will sell its current 10 per cent stake.
The transaction was reportedly valued at $1.5 billion.
But don’t think this news means that Cirque is in financial trouble. When questioned on the potential of any financial stress, Laliberte was quick to remind the press that Cirque remains a highly profitable venture, and sells 11 million tickets a year.
The deal could mean bigger and better things for the company, however.
Laliberte pointed to the fact that such strategic alignments can nearly double Cirque’s growth by penetrating the complex Chinese market and expanding third-party licensing deals and digital media.
The concern among Cirque-loving Canadians, of course, is that Cirque will lose its uniquely Canadian identity. We’re being assured, however, that this won’t happen. The owners have committed to preserve the company’s Montreal headquarters, and incoming chairman, TPG’s Mitch Garber, has stressed his understanding of the company’s focus on Quebec-based creativity.
Meanwhile, a recent newspaper cartoon showed U.S. flags waving over the Cirque’s iconic big top.
Much like watching the performers themselves, we’ll have to wait to see how it all unfolds.