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GTCR to invest in ticket marketplace Vivid Seats

Vivid Seats, a secondary ticket marketplace backed by Vista Equity Partners, is getting a new owner.

GTCR, a Chicago buyout shop, said May 16 that it agreed to make a strategic investment in Vivid Seats. Terms weren’t announced, but Vista Equity is retaining a minority stake, a source said. Vivid Co-Founders Jerry Bednyak and Eric Vassilatos remain investors. The deal is expected to close in Q2.

Founded in 2001, Vivid provides a marketplace to buy and sell tickets and event packages for live sports, concerts and theater events. The Chicago company is the No. 3 player in the online secondary marketplace, behind eBay’s StubHub and Ticketmaster, backed by Live Nation.

Vivid Seats’ technology “makes the experience as seamless as possible for both the sellers and buyers,” said Lawrence Fey, a GTCR managing director.

No job cuts or management changes are expected at Vivid, Fey said. “We will continue expanding the organization to facilitate continued growth,” he said.

Vista Equity acquired Vivid Seats in January 2016. The deal was reportedly valued at $850 million. The following September, Vivid raised $585 million in loans that it used, along with cash on its balance sheet, to refinance debt and pay a special dividend to its financial sponsor, according to S&P Global Ratings. It’s unclear how much Vista received with the dividend.

Vista put Vivid up for sale earlier this year; the company was expected to fetch $1.5 billion, TechCrunch reported in March. Morgan Stanley advised on the process, a statement said. Amazon, Priceline and StubHub looked at Vivid but passed on the deal, the story said.

For GTCR, the deal is its first investment in a ticket company. The firm considers Vivid Seats a combination of technology and business services, Fey said. One of GTCR’s most recent business services deal is security monitoring company Property 1, which it sold to Apollo Global Management in 2015.

GTCR used its 11th fund, which closed on $3.85 billion in 2014, to invest in Vivid Seats.

Pedro Costa of Morgan Stanley, along with William Blair, advised Vista/Vivid Seats. Tim Karman of RBC Capital Markets and Kurt Kohlmeyer of Barclays provided financial advice to GTCR. Jennifer Perkins and Edward Sonnenschein of Latham & Watkins were GTCR’s attorneys.

Executives for Vivid Seats declined comment.

Action Item: Contact Robert Smith, Vista CEO, at (512) 730-2400

Chicago Cubs catcher Willson Contreras (40) on May 12, 2017 is congratulated by teammates after hitting a solo home run during the second inning against the St. Louis Cardinals at Busch Stadium in St. Louis. Photo courtesy Scott Kane-USA Today Sports