Formula One’s controlling shareholder CVC Capital Partners, the private equity group, sold a 21-per-cent stake in the motor-racing series for US$1.6 billion (€1.25 billion). The sale comes ahead of a planned initial public offering on the Singapore Stock Exchange.
The buyers of the shares CVC has sold are global investment manager BlackRock, asset manager Waddell & Reed and Norway’s Norges Bank. The deals value Formula One at $7.2 billion, or $9.1 billion including debt, according to the Financial Times.
Formula One’s revenues are expected to reach $1.9 billion this year. Television rights are one of the series’ key revenue streams.
The latest deals are partly aimed at convincing prospective share buyers in the upcoming IPO that the motor-racing series is worth the valuation that will be placed on it. The IPO is set to be priced before the end of June, after Formula One and its bankers meet with investors and fund managers to gauge demand. Formula One’s stakeholders are seeking to raise at least $3 billion through the IPO, but it is set to be launched amidst tough conditions in the equity markets.
CVC had held a 63.4-per-cent stake in Formula One before the latest share sale. It remains its largest and controlling shareholder.
“This is great news for Formula One and an important step in its development,” Donald Mackenzie, managing partner of CVC Capital Partners, said. “CVC became the controlling shareholder of Formula One in 2006. Since that date we have supported the company and its management as they have grown the company with great success. The addition of these three highly regarded investors to our share register is validation of this success, and we look forward to working with our new partners over the coming years.”