Ron Tan in The Business Times

CITYNEON has obtained a S$235 million shot in the arm in its recently closed private fundraising round from existing investors such as Temasek’s Pavilion Capital and EDBI, as well as new investors such as Seatown Holdings (also owned by Temasek), Qatar’s Doha Venture Capital, and other financial institutions and family offices in Singapore and China.

The funds raised will tip the value of the global experience entertainment company, which delisted from the Singapore Exchange (SGX) in February 2019 at a market capitalisation of S$300 million or so, to more than S$1 billion.

“We’re a unicorn,” executive chairman and Group CEO Ron Tan joked, of the company that was founded in 1956. Proceeds will go towards building more intellectual property (IP) exhibition sets, as the group charts an aggressive growth path in 2021, taking advantage of captive domestic audiences by launching more exhibitions, including in nascent markets such as Japan, Brazil and Canada.

Last year was a “scary” and “worrying” year, Mr Tan said, especially in the months when countries were locked down and the group generated zero revenue.

But the recovery was also swift, he noted, with China’s recovery beginning last year leading the region to contribute about 70 per cent of the group’s total revenue in 2020, while visitors in Las Vegas have hit record highs in the past six weeks, as more people got vaccinated and con dence about public health safety improved.

Cityneon is launching its Jurassic World exhibition in Dallas, Texas this June and has seen strong forward bookings, too. Mr Tan expects the US to contribute more than two- fths of its revenue this and next year, given the tremendous activity there.

Currently, under its Hollywood IP partnership vertical, Cityneon’s exhibition sets have gone to more than 50 cities around the world. With ve IPs under its belt (Avengers, Jurassic World, Hunger Games, Transformers and Avatar) and two more by year-end, it is the world’s largest Hollywood IP partner, capturing more than 30 per cent of the market share.

Mr Tan has always emphasised the two criteria that IPs must meet before Cityneon will consider acquiring them: first, box-office takings need to be at least US$1 billion; second, the movie must have a sequel.

Cityneon is also building up its second vertical now, partnering governments to debut exhibitions of rare, original artefacts that focus on ancient civilisations for history buffs. This is its own IP and “needs patience and capital” to grow, he said.

It has a third vertical up its sleeves – immersive exhibitions related to the world of e-gaming, to appeal to the millennial crowd. His dream is that by the end of 2022, the group will have 10 million unique visitors per year – double its present numbers of close to five million visitors.

The group has also grown via acquisitions. In January 2020, it announced its acquisition of Animax Designs, a global firm which produces animatronic characters. This segment is hiring engineers now to enhance the technology behind its entertainment robotics that is so critical to its exhibitions.

Asked about his listing plans, Mr Tan replied that he prefers to focus on the business first and let the rest “take care of itself”. “We have been approached. I mean, it’s tempting because right now we are quite an interesting, sexy company. But we are market-neutral about Singapore, Hong Kong or the US, as long as it is a major stock exchange market. The board will have to come up with a collective decision where we want to go,” he said.

But he also clarified categorically that: “I’m not the kind to leave SGX and seek an arbitrage and go to Hong Kong.”

Some such as Osim International, Time Watch, Luye Pharma and Want Want have made such a geographical switch, while other dual-listed ones such as Alibaba Pictures Group, Fortune Reit and Genting Hong Kong have given up their secondary listing in Singapore to focus on their primary listing in Hong Kong.

Cityneon had delisted at its peak at S$1.30 per share, citing reasons such as the tensions of different expectations from different groups of shareholders. Mr Tan said that since then, management has value added to the business. “I hope that this company will one day be worth S$5 billion to S$7 billion, similar to the size at which Lego’s founding family and Blackstone bought Merlin at (US$7.5 billion).

“Right now, I really want to make this into the world’s largest experience entertainment provider. And in order to do that, we need to have access to capital. In order to become competitive and noticeable on the world stage, we will need to tap into public markets at some point.”

The Edge, in a February article, cited from a term sheet it has seen, that Cityneon’s FY20 revenue was about US$79 million, Ebitda was US$26 million, while net profit was just US$1 million.

However, a big jump is expected for FY21, with forecast revenue surging to US$215 million; Ebitda to US$88 million, and net income to about US$45 million.

The term sheet also said that Cityneon’s pre-financing valuation was S$850 million, translating to S$3.03 per share. It has plans for an initial public offering no later than the second quarter of 2023, at a valuation of at least S$1.32 billion.

Such ambitions are also reflected in its plans to build more travelling and semi-permanent sets, and targets to launch six experiences in China and five in the US by the end of 2021. This year, it also plans to reopen experiences that were temporarily closed in 2020, such as in Toronto, Canada, and Seoul, Korea.

The size of its exhibitions at about 20,000 to 30,000 square feet work in its favour for practising safe distancing as the pandemic persists in some countries. Meanwhile, consumers restless from not being to travel seem to be flocking to these experiences for entertainment. “People are starting to co-exist with Covid-19,” Mr Tan said.

Mr Tan, along with veteran Hong Kong entrepreneur Johnson Ko, remain the largest shareholders of the company after the fundraising exercise. They were the ones that took the company private by their vehicle, West Knighton, in 2019.

Singapore has long been too small a market without the critical mass its exhibitions need to do well, but Mr Tan added that he has plans to bring in “a big IP” next year as a showcase to Singaporeans. “But also to show my mother what I do,” he added.

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Cityneon CEO Ron Tan

West Knighton, a special purpose vehicle owned by Ko and Tan, launched a mandatory unconditional cash offer for the rest of the shares after on Monday purchasing an 68.95% stake in Cityneon from Lucrum 1 Investment at $1.30 per share for $219.3 million.

The $1.30 offer price values the Cityneon at $318 million and is at a premium to the highest ever closing price of the company, with a premium of 19.2% over the volume-weighted average price of the shares for the 12-month period respectively up to the last trading date.

Tan and Ko intend to delist and privatise the company to gain greater management control and flexibility in the implementation of strategic and operational initiatives of the group and do away with compliance costs associated with the maintenance of its listing.

The price is also final and unconditional and shareholders who accept the offer will receive payment of the offer price within seven business days of the date of receipt of their valid acceptances by the offeror, says Credit Suisse which is the financial adviser to West Knighton.

Ron Tan Entrepreneur of the Year


Ron Tan - CEO

SINGAPORE – Five entrepreneurs have been named category winners in the 18th annual EY Entrepreneur of the Year 2019 awards on Tuesday.

They are:

  • Ron Tan, executive chairman and group CEO of Cityneon Holdings, winner in the media and entertainment category;
  • Ng Gim Choo, founder and managing director of EtonHouse International Education Group, winner in the education category;
  • David (Hyonmoo) Lee, CEO of IYUNO Media Group, winner in the digital media supply chain category;
  • Kong Wan Sing, founder and CEO of JustCo, winner in the workspace solutions category; and
  • Yeah Hiang Nam (PMB), managing director and CEO of ValueMax Group Limited, winner in the financial services category.

The five winners were selected from close to 40 nominations by an independent judging panel.

The winners will be honoured at a gala to be held on Oct 3 at The Ritz-Carlton, Millenia Singapore. Minister in the Prime Minister’s Office and secretary-general of the National Trades Union Congress Ng Chee Meng will be the guest of honour.

At the gala, one of the five winners will be named EY Entrepreneur Of The Year 2019 Singapore, and will represent the Republic to compete with contenders from more than 50 countries at the annual EY World Entrepreneur Of The Year award in Monte Carlo in 2020.

EY also named the winners of two honorary awards.

Dennis A Uy, chairman and president of Udenna Corporation, won the EY Asean Entrepreneurial Excellence award, which recognises successful South-east Asian businesses that contribute to the region’s economy and community. Far East Organization was named the winner of the the EY Family Business Award of Excellence.

For more information about Cityneon Holdings Private Limited, please read more here.

Ron Tan Peak Magazine Cover

To comic book devotees and movie buffs, Ron Tan has the best job in the world. As executive chairman and group CEO of Cityneon, he gets to call the shots when building theme park sets and exhibitions filled with superheroes, robots and dinosaurs. But getting there required true grit.

It was the year 2008 when Ron Tan found himself in a bit of a pickle. He and his two friends had made a pitch to Marvel and Disney to produce a one-of-a-kind exhibition celebrating Marvel’s Avengers franchise – and somehow won it. “I wouldn’t say it was because we had the strongest concept, which was based on delivering experience. Our winning the contract had more to do with everyone else dropping out,” says Tan with disarming frankness. “When we got the contract, we were thrilled – it was a leap of faith on Marvel’s part. We popped the champagne after we signed it. But after that everything fell apart.”

With no prior experience in building an exhibition of this scale (or any exhibition at all, really) the trio had to hire 200 to 300 freelancers to work on the project, taking up 50,000 sq ft of space in Valencia, California, even though the exhibition was set to debut in New York. They were now 250 per cent over budget and two weeks late to launch. The pile of letters threatening legal action was growing ominously taller.

In those moments an ordinary man would have crumbled under the pressure, but we don’t put ordinary men on our covers.

Tan wound up saving the day with his extraordinary powers of perseverance. He should not have built the exhibition in California, for example, which was an expensive place to run a business and led to additional costs because they had to ship the products east. “I gave up many, many times – but only in my mind. The next day I would get up, forget the fact that I had given up because there were so many things to deal with, and just keep going,” Tan, 48, recounts. “When people become successful they like to look back and think they had a special part to play in that grand plan, but the only part we played was to keep going, even when we went the wrong way or had to make a lot of U-turns.”

When the Marvel’s Avengers Station exhibition finally opened in New York City’s Discovery Times Square museum in May 2014, it was a raging success and has since made its way to Beijing, Seoul, London, Paris, Sydney, Moscow and Singapore. “But it was a very long and painful journey. I still keep that folder of legal letters at home to look at when things get rough, as a reminder that nothing could ever be worse than that time.”

Victory Hill Exhibitions in 2011 following the deal with Disney, Tan was approached by Singapore-listed firm Cityneon four years later with a buyout offer. From then on, it was less pain and all gain. With Tan’s direction and Cityneon’s resources, the company’s market capitalisation grew from $20 million to over $300 million last year. As of this February, Cityneon was delisted from SGX in order to gain more control of the company’s future direction, and revenue is expected to hit $250 million this financial year – almost double that of 2018. Disney’s “last choice” had become the go-to name for mega-movie franchise exhibitions that include Transformers, Jurassic World, Hunger Games and Universal Studios.

Fun Formula

But all of this, Tan says, happened quite by chance. “I left the corporate life in 2003 and while browsing autobiographies in Kinokuniya one day, I came across the story of Guy Laliberte, the man behind Cirque du Soleil. Who could have imagined a circus without animals back then? Or one that could sell its own merchandise? That book left a deep impression.”

Inspired, Tan realised that the secret to a good experience was storytelling and personalisation – two themes that drove the Avengers Station. “No one had done anything like it before. Up until then exhibitions were just architecture you walked through,” he points out. In the Avengers Station, visitors are inducted as recruits, experiencing the comic book-based universe through high-tech interactive displays placed among original sets, props, costumes and special effects. “These days when you take a group photo, how good the photo turns out is dependent on how you look, not how everyone else looks. So the personalised experience is key.”

Technology has helped in that regard, but Tan maintains that it should only be used to enhance an experience, not centre it. “We have AI and VR now but people ultimately prefer to be wowed by the real thing,” he says. “One of our most popular experiences is Jurassic World: The Exhibition. It’s weird, but what stood out for people was the realistic skin and movements of our animatronics. They would rather see a physical dinosaur than a holographic one.”

Even with these insights it still seems incredible how a relatively small local firm could gain and maintain the trust of billion-dollar US brands. This Tan credits to the diversity and dedication of his team, which consists of 400 to 500 staff based all over the world. Rather than hire people with an exhibition background, Tan looked for people who cut their teeth in entertainment. “One of my creatives was from Cirque du Soleil and studio executives found his perspectives fresh and interesting, while my tech and operations guy came from Sea World. He managed fish, not installations.”

Tan believes Cityneon has gained a reputation as brand custodians by approaching studios with cautious reverence. “Pitching to big names is always scary. You have to understand that you are talking to someone who has lived and breathed their brand every day, so for you to go in and tell them you want to build an experience around that, you have to really understand what they’re about,” he says. This is why it can take 18 to 24 months to complete a project, and also why his creative team are often die-hard movie fans themselves. “They know everything, down to the Pantone shade of Thanos’ pants. My job is to come in from a business and casual fan point of view.”

Being an Asian CEO helps, too. “Our clients find it intriguing,” he laughs. “It’s rare to find an Asian CEO in this business. A chairman, perhaps, because we’re supposedly good with money, but not a CEO who predominantly handles Western intellectual properties (IPs). But the industry has seen that we have had no issues in the last 10 years, and we are able to penetrate markets they want to get into.” China is of course one of those markets, and with China-based Citic Capital investing an approximate 10 per cent stake in the company, Tan is gearing up for expansion into North Asia.

The plan now is to become the biggest player in this field, and seeing as they’re courting two more IPs – keeping in mind that Cityneon’s criteria is that these IPs need to have made at least US$1 billion ($1.4 million) in ticket sales with sequels or prequels planned – it’s safe to assume the goal isn’t too big of a reach. In fact, Tan is thinking out of the box office.

“We want to move into original artefacts, like the Terracotta Army of Xi’an. Anyone can exhibit them but they can be pretty dry, so I want to give people context and content. The younger demographic may think a cup is a cup is a cup, but if there’s a good story behind this cup, it could excite them,” he says. Cityneon is also working on its own asset-based IP, which Tan hopes to release in Singapore next year. “90 per cent of our profits come from outside of Singapore, so we hope to do more here.”

The Thing With Luck

Not one thing Tan has shared so far has been with the slightest hint of a frown or reminiscent distress. Maybe it’s easy to be cheerful when you’re sitting in a spacious office decorated with comic book memorabilia, housed in a shiny new office building purchased two years ago, while basking in the glow of the title of EY Entrepreneur of the Year 2019 in the media and entertainment category. But it’s more likely that Tan’s smile, which isn’t moulded for charm or carefully engineered to mimic charisma, comes from a place of deep gratitude.

“I was awarded the Singapore Government Scholarship to pursue a bachelor’s degree in tourism from the University of Hawaii, but I didn’t do well in the system and saved up enough to break my bond after five and a half years. I later joined a multinational company but after six years with them I was made redundant in six minutes. Working on Avengers Station was so awful that if there was a chance to go back and do it all again, I wouldn’t take it,” says Tan, recounting the periods where life handed him enough lemons to fill an Olympic-sized pool with lemonade. But he’s thankful for each and every one of them as they taught him valuable skills and experiences that serve him well today. “Being able to have this interview is a blessing. It’s a beautiful moment. I’m so glad we’re doing this for Christmas because it’s about giving thanks.”

You would think a man whose job is to recreate cinematic worlds for the general public would know how to cut loose during the holidays but Tan admits he’s “actually a pretty boring person”. He unwinds by taking walks every morning and playing the piano. “I’m a creature of habit. I like to do the same things over and over. I like my work, so I don’t stop working.”

Indeed, even if Cityneon hadn’t come along to add sequels to Tan’s career, he would have simply found another crazy idea to bet on. “Maybe I would be with a private equity firm or something,” he shrugs. “That’s the thing about entrepreneurs – something will definitely happen as long as you keep believing it will. There’s never just one route to get to where you want to go.”