For private equity firms, acquiring an iconic well-known brand brings with it a unique set of challenges. For Clarion Capital Partners, which recently bought renowned dance studio franchise Arthur Murray International, the challenges were twofold: honoring the company’s 112-year-old history and legacy while racing against the clock to close the deal quickly as owner and CEO Philip Masters was 97 years old.
Masters, who presided over Arthur Murray for 60 years before passing away in late November, had tapped Gary Edwards, a ballroom dance champion and Arthur Murray ambassador, to succeed him and take over the company. However, there was a problem.
“Gary needed a partner to acquire the business,” explained Eric Kogan, a partner at Clarion Capital.
Edwards hired Citicourt & Co, a London-based M&A and corporate adviser, to find a private equity investor. That’s when Clarion Capital entered the fray.
The lower mid-market buyout shop was bullish about Arthur Murray for several reasons: its enormous brand recognition, the emotional engagement people have with the brand and dance’s health benefits.
“If you ask people who have taken dance lessons, which brands do you know, by far, the largest number of people know Arthur Murray,” said Kogan. “The business has enormous momentum – people are taking more lessons. Dance plays a role in health and wellness and that allows [people] to move and shut away from screens, technology and phones and focus on dancing. As a result, there’s a community created with Arthur Murray.”
Also, Arthur Murray being an older, storied American brand was aligned with Clarion’s investment strategy as the PE firm boasts a number of portfolio companies that are well over 100 years old. Among them are Lenox Corporation, a consumer home products manufacturer based in Bristol, Pennsylvania, and luxury luggage brand Hartmann, based in Lebanon, Tennessee.
“We have a very strong experience with understanding iconic American brands and how to position them for the next generation,” said Kogan.
The Arthur Murray deal began in the spring of 2024 when Clarion met with Edwards. The acquisition closed in early December, shortly after Masters’ death, with his widow fulfilling her late husband’s wishes. Edwards has since become CEO of Arthur Murray.
‘A lot of opportunities in this little ecosystem’
Clarion plans to expand the company through organic growth.
“We want to grow the revenues per franchise – more lessons, more events, stimulate through more publicity and marketing,” said Kogan, “and also grow the number of locations. This is a franchise business, so engaged community-oriented dancers will lead to more vibrant, profitable franchises and a better system all over the world.”
That doesn’t mean add-on acquisitions are off the table. Kogan said there may be opportunities, but they would have to be considered on “a thoughtful, strategic basis.”
First and foremost, it’s “an organic growth story,” he underscored. “We can increase the awareness and the number of studios and people going into studios. There’s a lot of opportunities in this little ecosystem and we think we’re in the best position to capitalize on exciting opportunities.”
Currently, Arthur Murray has 300 dance studios in two dozen countries across the globe. Headquartered in Coral Gables, Florida, Arthur Murray primarily teaches ballroom dance, which includes the waltz (slow and Viennese), foxtrot, cha-cha, rumba and salsa.
Referencing the company slogan “Walking In, Dancing Out,” Kogan added, “We hope to continue the fun here and put a smile on people’s faces.”
