Fueled by the popularity of “Dancing with the Stars,” viral social media clips and the fitness aspect, the dance market is growing. PE has taken notice. Clarion Capital Partners’s Eric Kogan discusses the firm’s recent acquisition of the Arthur Murray dance studios franchisor.
Kogan, a Clarion partner overseeing the firm’s lower middle-market investment, says the adult dance market is growing at about $1 billion and aims to grow Arthur Murray by double digits by expanding offerings to cruise ships and hotels. New York-based Clarion sees cross-over opportunities with its V10 Entertainment digital media platform, which owns “America’s Funniest Videos.”
“The awareness of “Dancing with the Stars” definitely helps,” Kogan says. “Dancing is eminently clippable and that also helps create awareness.”
New York-based TZP Group helped launch PE’s move into dance last year when it acquired Break The Floor Productions and Star Dance Alliance to create the platform Dance One Holdings. TZP says its platform of 10,000 dance studios represents the largest institutional dance investment.
“We believe strongly in the growth of the dance category,” says TZP partner Dan Galpern.
Carroll Street Capital in September invested in Bresh, which organizes Latin-based dance parties that have drawn millions since it launched in 2016.
Analysts say dance is experiencing the same post-Covid boost gyms, yoga studios and other fitness providers are enjoying.
“It‘s not a gym but a health and wellness play,” says Kogan. “It’s also a franchise model, which is expandable.”
“People are looking for physical experiences and a sense of accomplishment,” Kogan says. “The number of lessons are increasing.”
Arthur Murray has grown to 300 studios since its namesake launched the business 112 years ago. Clarion purchased the franchise from Philip Masters, who bought the studios 60 years ago from Arthur Murray.
Masters died at 97 just as the transaction was closing and his widow finished the process.
Clarion purchased Arthur Murray out of its fourth fund, which closed on $677 million earlier this year.
The fourth fund closed $77 million over its $600 million target and 59 percent more than its $427 million predecessor vehicle.
Clarion’s partners committed 15 percent of Fund IV’s capital, far above the industry average. According to Investec‘s Private Equity Trends 2024 report, the average GP commitment to private equity funds was three percent in 2023, down from 4.8 percent in 2021.
Contact Kogan at [email protected].
