BEIJING: Wanda Sports Group Company Limited Thursday announced that it has entered into a definitive stock purchase agreement with Advance Publications Inc., owner of media company Conde Nast, to sell The IRONMAN Group in an all cash transaction at an enterprise value of $730 million (subject to customary purchase price adjustments).
Wanda Sports Group’s US-listed shares soared 61% in premarket trade following the announcement of the sale to the private, family-owned business.
The IRONMAN Group is comprised of a global portfolio of mass participation sports events, across triathlon, running, trail running, cycling and mountain biking. As part of the agreement, Wanda Sports Group will continue to operate IRONMAN and IRONMAN 70.3 triathlon series, Rock ‘n’ Roll Marathon Series and Epic Series off-road mountain bike series races of The IRONMAN Group in China under an exclusive license agreement.
Hengming Yang, president and CEO of Wanda Sports Group, said: “This transaction represents a great outcome for both parties. Advance is acquiring the world’s largest organizer of mass participation sports events and a portfolio of brands synonymous with excellence, and we will unlock significant value for our shareholders.
“Looking ahead, we will continue to leverage the strengths of our Infront and Wanda Sports China businesses to expand our global sports, media and marketing platform,” added Yang. “Our focus remains on ensuring our long-term partners get the most out of every event by increasing appeal, reach and fan engagement, organizing, operating and licensing popular mass participation events, and strengthening our foothold in China to serve the large and fast growing sports market. We will also benefit from a stronger balance sheet as we execute our strategy and create shareholder value.”
Andrew Messick, president & CEO of The IRONMAN Group, said: “We thank Wanda Sports Group for its support over the past four years and are proud of what we have accomplished together. We look forward to continuing our work in China with Wanda Sports Group in the coming years. Further, we are excited to join forces with Advance and benefit from its breadth of expertise as we continue to deliver the exceptional experiences for which we are known.”
Based in New York, Advance owns, operates and invests in companies spanning media, entertainment, technology, communications and education.
Subsequent to the sale, Wanda Sports Group will continue to operate three business segments – Mass Participation, Spectator Sports, and Digital, Production, Sports Solutions (DPSS).
For its international Mass Participation business, the company, through Infront, will continue to organize, operate and license a broad portfolio of mass participation sports events for amateur athletes, with the focus on running, hiking, road cycling, fitness competitions, and obstacle course racing. In China, the company has a combination of an existing portfolio of city marathons, such as the Chengdu Marathon and Shenyang International Marathon, and races and events that the company has rights to under the exclusive license agreement with The IRONMAN Group.
The sale is subject to customary conditions, including regulatory approval, and is expected to close in the second quarter of 2020. The company intends to use the net proceeds from the sale to repay the principal amount of $230 million and related interest and fees outstanding under the Credit Suisse facility and the $50 million outstanding under a promissory note issued to Wanda Sports & Media (Hong Kong) Holding Co. Limited. As to the balance of the proceeds, the company intends to use all or a substantial portion of them to fund dividends or share buy-backs, subject to shareholder approval.
Credit Suisse acted as the exclusive financial advisor and Reed Smith LLP acted as the legal advisor to Wanda Sports Group in this transaction. Advance was advised by BofA Securities and Sullivan & Cromwell LLP.
