CVC Revs Up Formula One Deal At $4.4B Valuation by Kevin Dowd, PitchBook
A consortium of investors led by CVC Capital Partners has agreed to sell global motorsports business Formula One to Liberty Media (NASDAQ: LMCA), part of billionaire John Malone’s media empire that includes Charter Communications and Time Warner Cable. The deal represents an equity value of $4.4 billion and a total enterprise value of $8 billion, including debt.
As you might expect with that sort of price tag, the transaction is a complicated one. Liberty Media has already paid $746 million for an 18.7% stake in Formula One. Now, the company has agreed to acquire 100% of Delta Topco, the parent company of Formula One. Upon the completion of that deal, Liberty Media will rename itself Formula One Group, and the consortium of sellers led by CVC will own roughly 65% of that new company’s equity.
So in essence, Formula One is taking over Liberty Media as much as the opposite is true.
Founded in 1950, Formula One is the global leader in single-seat, open-wheel auto racing. The series draws upward of 400 million viewers annually on TV, and the teams that race in Formula One reportedly logged more than $1.5 billion in revenue during 2015. Since CVC acquired the business in a leveraged buyout during 2006, the firm has earned more than $4 billion in profits and logged an ROI of 351.8%, according to a Guardian report from last year.