Information on the Target

Aztec/Shaffer, LLC, commonly referred to as Aztec/Shaffer, is a leading tent and equipment rental company based in Houston, Texas. It operates as the largest provider of tents and event rental services in the region, catering to major events such as the Houston Livestock Show & Rodeo and the Texas MS150 bike ride. Additionally, the company has played a crucial role in supplying tents and services for significant COVID-19 testing and vaccination sites across the area.

Shaffer, a subsidiary of Aztec, specializes in providing hospitality structures and tents for high-profile sporting events, including those organized by the PGA Tour, Formula 1, and NASCAR at the Circuit of the Americas. Together, both entities form a pivotal player in the event rental industry, distinguished by a diverse portfolio of equipment and a strong clientele.

Industry Overview in the Target’s Specific Country

The event rental industry in the United States, particularly in Texas, is characterized by a diverse range of services including rental of tents, furniture, and additional equipment for various occasions. This sector has faced significant challenges due to the COVID-19 pandemic, which led to widespread event cancellations and a substantial decline in revenue for many companies.

However, as restrictions are easing and consumer confidence is returning, there is a noticeable uptick in demand for event services. Major sporting events and large gatherings are gradually resuming, indicating a positive trend for companies like Aztec/Shaffer that are poised to capitalize on this resurgence.

Houston is one of the fastest-growing cities in the United States, and its vibrant event landscape reflects this growth. The city's hosting of major events, coupled with its strong cultural and sporting calendar, presents substantial opportunities for event rental providers.

With the vaccination rollout progressing and public safety measures in place, there is a strong expectation of recovery in the event rental market. This resurgence is expected to lead to increased revenues and profitability for established players in the sector.

The Rationale Behind the Deal

The rationale behind the acquisition of Aztec/Shaffer stems from the company’s established market presence, high-quality equipment, and a well-regarded client base. Following its restructuring process, the company is better positioned to meet the anticipated rise in demand for event services as large-scale gatherings resume.

The sale, facilitated under Section 363 of the U.S. Bankruptcy Code, not only ensures the continuity of operations for Aztec/Shaffer but also provides a vital opportunity for the new investors to leverage the company's assets and capabilities to capture a significant share of the recovering market.

Information About the Investor

The consortium acquiring Aztec/Shaffer includes Arena Events Group plc, a global leader in offering comprehensive event solutions, as well as Summit Investment Management LLC and affiliated entities of American General Life Insurance Company (AIG). Arena has a strong track record of successful event management and has been strategically expanding its market reach.

Their investment in Aztec/Shaffer exemplifies confidence in the long-term growth potential of the event rental sector. Given Arena's expertise in event logistics and management, they are well-equipped to enhance the operational efficiencies and market positioning of Aztec/Shaffer.

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The acquisition of Aztec/Shaffer by Arena and its partners represents a potentially favorable investment decision. With the event rental market on the verge of recovery, the operational stability achieved through the restructuring process positions Aztec/Shaffer to capitalize on upcoming opportunities effectively.

The company’s strong brand recognition, coupled with an extensive inventory of high-quality equipment, provides a competitive advantage as demand for events surges. Additionally, the proactive management by Carl Marks Advisors during the restructuring phase has laid a solid foundation for future growth.

Moreover, the strategic alignment of Aztec/Shaffer's capabilities with Arena’s existing services could create synergies that enhance operational efficiencies and broaden market reach.

In conclusion, this investment has the potential to yield significant returns for the consortium as the events industry recovers, making it a smart move within a promising sector.

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