Pimco, the giant asset management group, is backing a £3bn deal orchestrated by the sports investment vehicle which owns stakes in the women’s professional tennis tour and Premiership Rugby.
Sky News has learnt that Pimco, which manages roughly $2trn in assets, has agreed to anchor a €2.35bn senior debt financing expected to be finalised by Global Sport Group (GSG) this week.
The refinancing forms part of a broader overhaul of GSG’s capital structure, which also includes roughly €900m of junior debt as well as the sale of a minority equity stake in the business.
CVC Capital Partners, the private equity firm which has overseen the creation of GSG to house its portfolio of sports assets, has been working on the refinancing for several months.
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The Pimco-led senior debt deal is said by debt market sources to have been struck on favourable terms for the CVC-controlled company.
Sources also told Sky News last month that KKR, the American private equity giant, was in advanced talks about acquiring a minority equity stake in the vehicle, which also owns shareholdings in Six Nations Rugby, international volleyball and the top flights of French and Spanish men’s football.
In total, KKR, which recently agreed the purchase of sports investment firm Arctos, is investing €1.6bn across GSG’s capital structure, including debt and equity, according to people close to the situation.
Britain’s Katie Boulter in action on the WTA tour. Pic: CTK via AP
The overall financing package, expected to be worth in the region of £3bn, will reinforce GSG’s ambitions of becoming the most sophisticated global investor in elite sports teams, leagues and other related properties.
The CVC-backed vehicle last month confirmed its acquisition of Equine Network, the largest for-profit equestrian sports league in the US.
Gemma Wright, a partner in CVC’s sports, media and entertainment team, said in relation to that transaction: “The creation of Global Sport Group was driven by our conviction that premium sports leagues benefit from long-term, specialist ownership and collaboration.
“CVC’s investment experience in sports spans over twenty years and, while much has changed in that time, sports IP remains a very attractive opportunity in which we continue to see significant potential for further innovation and growth.”
GSG is chaired by Marc Allera, the former BT Group consumer chief, and is now scouring the globe for other deal opportunities.
Its new warchest is expected to be deployed to buy assets in sports with substantial commercial growth prospects.
Once completed, the deal will allow CVC to remain invested in its sports portfolio for longer, while also paving the way for the sale of a minority stake in GSG or a future initial public offering on a major international exchange.
Having made billions of dollars from its ownership of Formula One motor racing – one of the most lucrative deals in the history of sport – CVC has bought stakes in leagues and other assets spanning a spectrum of elite sporting assets over the last two decades.
Its investment in the media rights to La Liga – Spain’s equivalent of the Premier League – is expected to generate a handsome return for the firm, although a comparable deal in France has faced challenges amid broadcasters’ financial challenges in the country.
CVC’s backing of global sports properties is intended to position it to maximise their commercial potential through new media and sponsorship rights deals, as well as their expansion into new formats aimed at drawing wider audiences amid rapid shifts in media consumption.
Its sporting assets will continue to remain autonomous and independent of one another, despite the new umbrella holding entity.
One expected benefit of the GSG approach would be the sourcing of new investment opportunities, with CVC potentially interested in the acquisition of further elite tennis tournaments.
Global sports properties have become one of the hottest growth areas for private capital in recent years, with firms such as Ares, Silver Lake Partners and Bridgepoint all investing substantial sums in teams, leagues and other assets across the industry.
CVC, GSG, KKR and Pimco all declined to comment.