CVC Capital Partners, the former owner of Formula One, is among a group of financial institutions chasing a deal to take control of MotoGP, the international motorcycle racing series.
The Luxembourg-based private equity group is considering a deal to buy a significant stake in Dorna, a Spanish sports management company that has the exclusive rights to promote and manage MotoGP, the motorcycling equivalent of F1, according to multiple people with knowledge of its intentions.
The deal could make CVC the largest shareholder in MotoGP’s parent and mark a return to a sport it has previously controlled. In 2006, CVC sold its stake in Dorna to rival private equity firm Bridgepoint for about €500m. Market insiders expect a new deal would value the Madrid-based sports company at well over €1bn in enterprise value.
“It’s a very expensive business,” said a banker who has known the business for years. “[But] people pay a lot of money to hold these rights . . . It’s got almost no capital expenditure and very high margins. It’s a cash machine.”
CVC faces fierce competition from other potential buyers who are considering a deal for Dorna, including Eurazeo and large family offices such as Groupe Bruxelles Lambert, according to two people familiar with their interest.
Yet, CVC appears in a strong position because of its past history with MotoGP, industry observers said. In 2006, CVC sold its shareholdings in Dorna as a condition imposed by the European Commission to approve the private equity group’s takeover of Formula One in the same year.
Management is also keen for CVC to acquire a stake given its past experience and its working relationship with CPPIB, the Canadian pension investor, which bought a 39 per cent stake in the sports management company in 2012, these people said.
According to people close to the potential sale, Dorna’s management has a preference for CVC as a buyer but they cautioned that other bidders may yet seize an advantage and a sale may not even happen.
“They want to speak to people who speak their language,” said a person familiar with Dorna’s thinking.
It also remains unclear the size of the stake that CVC and other potential bidders are seeking from either Bridgepoint or CPPIB, these people said.
But the move would mark a speedy comeback to motorsports for CVC, just 18 months after it sold its stake in F1 in a deal worth $8bn.
It also comes at a time when private equity groups are under mounting pressure to deploy large amounts of capital having raised their largest ever amount of funds.
Dorna became the rights holder to MotoGP in 1999. Under Carmelo Ezpeleta, chief executive, it has steadily built the sport through multimillion-dollar deals with sponsors, television broadcasters and advertising.
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Mr Ezpeleta is expected to remain chief executive of Dorna should a sale go ahead, according to people close to the talks.
With 175 races in 17 countries, MotoGP has gained popularity through riders such as Angel Nieto, who has won 13 world championships, and Valentino Rossi. Moto GP has claimed to have 300m viewers worldwide.
Reports suggested CVC made up to £400m from selling its shares to Bridgepoint. In 2012 CPPIB bought a 39 per cent stake in Dorna from Bridgepoint, valuing the company at more than €1bn. Bridgepoint continues to own about 40 per cent of Dorna.
A person close to the asset said that despite interest there was no formal sales process going on.
CVC, Bridgepoint, CPPIB and GBL declined to comment. Eurazeo and Dorna did not immediately reply to a request for comment.
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