Vivid Seats Lands SPAC Deal: Pent-Up Demand Could Make It A Reopening Trade

Vivid Seats Lands SPAC Deal: Pent-Up Demand Could Make It A Reopening Trade

 Photo by ActionVance on Unsplash

One of the largest ticketing platforms is going public with a SPAC deal announced Thursday.

The SPAC Deal: Vivid Seats announced a SPAC deal with Horizon Acquisition Corp (HZAC) valuing the company at a $1.95 billion equity market capitalization.

The company will receive $769 million in gross proceeds. Current Horizon Acquisition Corporation shareholders will own 20% of the new company.

About Vivid Seats: With a mission to “Experience It Live,” Vivid Seats has a scaled marketplace for buyers and sellers for tickets to sporting events, concerts, and theater.

The company supports over 12 million customers and 3,400 sellers across 200,000 listed events. Vivid Seats has over 17 million tickets sold annually prior to the COVID-19 pandemic.

The company has distribution partnerships with American Airlines Group Inc (AAL), Caesars Entertainment Inc (CZR), and Groupon Inc (GRPN).

Vivid Seats counts Live Nation Entertainment Inc (LYV) as a competitor in the ticketing field.

Growth Ahead: As one of the several event-related companies poised to benefit immediately from pent-up demand from the pandemic, Vivid Seats said it could also have long-term growth post-pandemic via strategic positioning and competitive advantages. 

The market size for ticketing is $39 billion according to the company’s investor presentation.

Vivid Seats has grown its revenue and orders from the creation and growth of its app. Order volume on the app are up 4x since 2017. In 2020, 40% of order volume came from the company’s app, which includes a tiered reward system.

Financials: In fiscal 2019, Vivid Seats had $2.3 billion in gross order volume. The company’s 2019 revenue was $471 million and EBITDA of $128 million.

In 2019, the company’s order volume was split 46% concerts, 42% sports, and 12% theaters.

The company estimates it will take until 2022 to hit order volume from the pre-pandemic 2019 levels. The company had revenue of $115 million in fiscal 2020. Estimates going forward are $168 million in 2021, $459 million in fiscal 2022, and $525 million in fiscal 2023.

Price Action: Shares of Horizon Acquisition Corporation are up 3.50% to $10.14 on Thursday morning.

Disclaimer: © 2021 Benzinga does not provide investment advice. All rights reserved.

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