Venue operator and hospitality destination provider Venu Holding has raised $86 million in a public equity offering that was oversubscribed.
On Tuesday (March 10), the Colorado-based company, which trades on the NYSE, said it sold 18.75 million shares at $4 apiece, generating $75 million in gross proceeds. Two days later, Venu founder, chairman and CEO J.W. Roth announced that the offering was oversubscribed, with the company raising $86 million.
In a recorded video message to shareholders, Roth said: “We just raised a ton of money. We did it from institutional investors who believe in what we’re building, and they’ve caught the vision. And we did it over the last week against enormous macroeconomic headwinds.”
He added: “The financial markets were getting destroyed this week. The Dow lost 2,000 points. Yet, our investors look past all of that and put their capital into Venu.”
On Tuesday, Venu’s stock hit an all-time low of $3.63. Its shares slightly pared losses on Wednesday to close 1.9% higher at $3.70.
“We just raised a ton of money. We did it from institutional investors who believe in what we’re building, and they’ve caught the vision.”
J.W. Roth, Venu
Roth said: “We might be $4 or $5 today, but we’re headed to $50. This capital is what accelerates us to get there.”
Venu said its offering came with warrants allowing investors to purchase additional shares at $5.00, exercisable over five years. The company has also granted a 45-day option to underwriters to buy up to an additional 2.8 million shares of common stock, and/or additional 2.8 million warrants to cover overallotments at the public offering price, minus the underwriting discount.
ThinkEquity served as sole book-runner.
Proceeds from the deal will be used to fund part of the development costs of The Sunset McKinney in Texas and The Sunset Broken Arrow in Oklahoma, to pay back a promissory note in the principal amount of $4.35 million issued in connection with the company’s recent acquisition of property in Centennial, Colorado where Venu plans to build an indoor music hall and restaurant.
Part of the proceeds will be used for working capital and other general corporate purposes.
In his video addressed to investors, Roth said the company does not expect to need to return to equity markets. “Not only did we close this raise, but we structured it in a way that we now have a pathway to another significant funding through the exercising of these warrants from the same sophisticated investors who understand exactly what we’re doing.”
“This means that combined with other financial instruments that we have in motion, we now have a clear strategic path to becoming fully funded and operationally profitable. We do not expect to need to come back to this… We are done.”
Roth said the capital allows Venu to carry premium inventory including fire pit suites, premium tickets, and fractional ownership. “All of that juices our P&L in a way that translates directly to much higher valuations of our company. That is why this raise was oversubscribed in the worst market conditions.”
Venu’s portfolio includes Ford Amphitheater, Sunset Amphitheaters, Phil Long Music Hall, The Hall at Bourbon Brothers, Bourbon Brothers Smokehouse and Tavern, Aikman Clubs, and Roth’s Sea & Steak.
“combined with other financial instruments that we have in motion, we now have a clear strategic path to becoming fully funded and operationally profitable. We do not expect to need to come back to this.”
J.W. Roth, Venu
The company has partnerships with AEG Presents, Aramark Sports + Entertainment, Billboard, and more, and counts musicians Niall Horan and Dierks Bentley among its shareholders. In October, Venu inked a strategic partnership with independent music publisher Primary Wave Music to bring “artist-inspired” programming and immersive content to its venues nationwide.
Roth said: “We have an incredible team that is only getting stronger. We’ve delivered unforgettable experiences to hundreds of thousands of fans. And at its core, our product is something special. We create memories. Music is the only product I know that creates a memory every single time.”
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