Ironman brand owner World Triathlon Corp (WTC) has taken out US$240 million in financing, the majority of which, US$220 million, will be used to pay out a dividend to its shareholders.
The US$220 million term loan is due for repayment in 2021 and a US$20 million ‘revolver’ (revolving credit facility, used as required) is due for repayment in 2019.
In 2008, private equity firm Providence Equity Partners became the owner of WTC (via the World Endurance Holdings entity) and with it took ownership of the Ironman brand and other properties, such as IronGirl, IronKids and the 5150 series.
Along the way, WTC has made a number of acquisitions to bolster its event offering. Recent deals include:
- In May, Ironman confirmed that it had acquired New Zealand’s largest road race, the Auckland Marathon.
- Also in May, Ironman confirmed that Victoria, British Columbia, will host the 31st race in the Ironman 70.3 North American Series and that Ironman has signed an agreement to acquire Lifesport Properties, owners of the Subaru Western Triathlon Series.
- In mid-April Ironman acquired Tritlon Spain SL, ‘owner and organizer of Challenge Barcelona and Half Challenge Barcelona.’ These races will now be operated as Ironman Barcelona and Ironman 70.3 Barcelona.
- The April announcement of the new Ironman Maryland event was made in connection with Ironman’s proposed acquisition of the ChesapeakeMan event from The Columbia Triathlon Association, also known as TriColumbia.
According to a report on Fortune.com, following Ironman’s US$240 million financing round, Standard & Poor’s attached a ‘B’ rating on the debt, ‘because of the company’s exposure if the economy sours.’
Moody’s has meanwhile assigned a B2 corporate family rating on the debt indicating that the ‘outlook is stable’ for the business. Moody’s reflected on Ironman’s ‘highly predictable and recurring revenue, strong brand loyalty and good free cash flow generation due to its minimal capital requirements.’
‘Moody’s also expects WTC to benefit from the positive industry trend of higher participation rates in triathlon races as it expands by offering additional events around the world. These strengths are offset by the company’s small scale, low margins, its narrow business focus, lack of tangible assets, reputation risks and high leverage from an aggressive financial policy reflected by the dividend recap.’
In its assessment, Moody’s continued and stated, ‘The Ironman brand is the most valuable aspect of the company and its strong following and high level of awareness, even amongst non-participants, allows WTC to successfully market and sell out many of its races well in advance of the event date. Additionally, due to the high level of brand awareness, Moody’s believes that it would be extremely difficult to displace WTC from its current leading position [in] the world of endurance triathlon.