Chinese property and investment firm Dalian Wanda Group is reported to be in exclusive talks to acquire IRONMAN brand owner World Triathlon Corp (WTC). A report by Reuters, cites ‘a person familiar with the matter’, and indicates that the deal could value the IRONMAN business and its associated brands (e.g. IRONMAN, IronKids, IronGirl and the 5150 series), at more than US$850 million.
Earlier this year, Reuters reported that Providence Equity Partners, the private equity firm owner of IRONMAN, was exploring options for the company. This could include a potential sale or initial public offering (IPO) for the IRONMAN business.
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.
It is reported that Dalian Wanda, also known as Wanda Group, has now outbid other potential buyers for WTC and is reportedly in negotiations to finalize a deal with Providence Equity. The Reuters report added that ‘there is no certainty that Dalian Wanda will manage to finalize a deal.’
With WTC’s reported EBITDA (earnings before interest, tax, depreciation and amortisation) at around US$50 million, a rumoured US$850 million deal would be a sizeable x17 multiple on operating earnings.
Dalian Wanda, known for its real estate holdings, has been expanding its media investments outside China in recent years. It bought sports marketing firm Infront Sports & Media from private equity firm Bridgepoint for €1.05 billion (US$1.14 billion) in February 2015. (Wanda also owns a 20% stake in Spanish soccer club Atlético Madrid.)
Interestingly, back in 2011, Infront signed a deal with WTC on sponsorship sales for IRONMAN and IM 70.3 races. This particular deal focused on Europe and South Africa, with Infront also serving as as a media adviser for IRONMAN in the region.
It is unclear if Infront now under Dalian Wanda ownership is still retained by the Europe and South Africa arm of WTC’s business. Although, Infront has in the past brokered sponsorship deals for IRONMAN in the region such as those for the Mercedes-Benz Viano and Power Horse energy drink. It could be a useful ally going forwards, particularly in the challenging area of generating deals with non-endemic sponsors, i.e. those companies that are beyond triathlon and are not active within the triathlon marketplace.
In 2014 and 2015, WTC has made a number of acquisitions to bolster its event offering and become a sizeable global business. Recent deals include:
2015
- In January 2015, IRONMAN acquired multiple events from Firstwave Events meaning that IRONMAN now owns and operates the Big Kahuna Triathlon and Santa Cruz Half Marathon/10K/5K. The Big Kahuna triathlon will be rebranded as IRONMAN 70.3 Santa Cruz and will take place on Sunday 13 September 2015.
This acquisition followed hot on the heels of two key deals in January:
- IRONMAN’s acquisition of multiple events from SUPERFROG, including the SUPERFROG, SUPER SEAL and SEAL Sprint triathlons; and
- IRONMAN’s acquisition of Optimum Sports Events, organizer of the Challenge Vichy triathlon and the Vichy Half Triathlon in France.
2014
- In May 2014, IRONMAN confirmed that it had acquired New Zealand’s largest road race, the Auckland Marathon.
- Also in May 2014, 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 2014 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 then proposed acquisition of the ChesapeakeMan event from The Columbia Triathlon Association, also known as TriColumbia.
Last summer, IRONMAN brand owner WTC took out US$240 million in financing. The majority of this, US$220 million, was used to pay out a dividend to its shareholders. The financing deal raised a few eyebrows in some media reports, which focused on the use of the debt/financing predominantly to pay out a dividend rather than fund capital investment for the company.
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www.provequity.com
www.wanda-group.com