Cirque Du Soleil

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Valuation, Merges and Acquisitions | “Even a Clown Can Do It: Cirque du Sole il Recreates Live Entertainment.” |

Guy Laliberté set out to reinvent the circus industry, in 1984. From its original incarnation as a troupe called ‘Le Club des Hauts Talons’, so named because of its host of stilt-walkers, LaLiberte’s Cirque du Soleil rapidly evolved from a pack of underemployed kids into one of Canada’s largest cultural exports. Almost 30 million people saw one of the troupe’s productions between 1984 and 2000. Cirqus du Soleil scrambled the existing traditions of the circus and the performing arts, and reinvented the wheel. With a US$1.7 million contract from the provincial government of Quebec, the show travelled the province, attracting some powerful fans that it would later need. Closing the first season with a surplus of US$50,000, Laliberte decided to promote his new show and invested heavily in a new tent and other equipment. Although it finished 1985, to critical acclaim, Cirque du Soleil was nevertheless US$750,000 in debt from its investments in equipment, despite extending the run several cities beyond the initial route.

The initial vision that drove the founders of the various New American circuses was more artistic that commercial, Cirques du Soleil took little time to become immensely profitable after its success at the Los Angeles Arts Festival. Over the time, Soleil has come up with lifecycle strategy that features an opening in Montreal followed by a North American tour, stretching over several years. Quidam produced for approximately US$5.9 million and first staged in Montreal in April 1996. Following a three-year tour of North America, the show travelled throughout Europe. Expected annual gross revenues at the start of the tour were US$14.6 million, a figure that has been exceed year after year by a significant amount, according to Soleil staff. By reinventing the circus industry, Cirque du Soleil created a phenomenon that has inspired and...