Silver Lake to Buy Cast & Crew

Cast & Crew Entertainment Services LLC, which provides payroll and other services to the entertainment industry, has a new private-equity backer.

Silver Lake is buying the Burbank, Calif., company in a deal that values Cast & Crew at $700 million including debt, people familiar with the matter said.

Beyond handling payroll and health insurance for clients, the company processes rights to future income streams, known as residuals, handles workers' compensation and labor relations issues, and provides advice around tax credits.

Its earnings are growing at roughly 15% annually, one of the people said.

The investment from Silver Lake will allow Cast & Crew to support its clients "in a rapidly evolving entertainment landscape," said Eric Belcher, Cast & Crew chief executive. Companies like Netflix Inc. and Amazon.com Inc. have increased their production of online content, which may drive growth for companies like Cast & Crew.

The people said Cast & Crew's growth opportunities include expanding its employment insurance and live events units, adding new offices as clients increasingly shoot offshore, and developing its expense management software.

Silver Lake, a Menlo Park, Calif., firm that focuses on technology-enabled investments, is buying Cast & Crew from a consortium led by New York private-equity firm ZM Capital LP, which in turn bought a controlling stake in the services provider in December 2012 from another buyout firm, ABRY Partners LLC. Cast & Crew's management will retain a small stake in the company, the people said.

The deal comes as private-equity firms continue to sell companies at a faster clip than they have previously in part due to robust demand from corporate buyers, fueled by inexpensive debt, as well as demand from other private-equity firms, which have raised record sums.

Silver Lake's other investments in the entertainment industry include William Morris Endeavor Entertainment LLC, which bought IMG Worldwide Inc. in May 2014.

Write to Gillian Tan at [e-mail]

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