The precise value of the Formula One motor racing group has been revealed in the latest filings of its UK holding company, Alpha Prema. The documents state that private equity firm CVC paid $1.7bn (£834m) for the group in March last year and the value is around 70 per cent higher than previously estimated.
Over $2bn of loans were secured in the leveraged buyout and the finance fees totalled $57m. Accountancy firm Ernst & Young alone received $2m for assisting with the debt-raising and $1.5m in due diligence fees connected to the acquisition.
Bambino, the family trust of F1 impresario Bernie Ecclestone, netted $478m from the sale, with three investment banks – JP Morgan, Lehman Brothers and Bayerische Landesbank – receiving the lion's share. They owned a 75 per cent stake in the sport which they received by being creditors of its previous owner – the fallen media giant Kirch.
The key cash-generating company in the F1 group is Formula One Administration (FOA), which holds the lucrative commercial rights to the sport and, according to its latest accounts, has annual revenues of $790m.
However, this does not include the estimated $300m generated annually by F1's trackside advertising and corporate hospitality. These revenues flow into Irish and Swiss companies which were later acquired by CVC at an estimated cost of $350m. This makes the F1 deal one of the largest ever done by CVC.
By comparison, in 1999, the private equity giant paid a total of $1.2bn for bookmaker William Hill, and four years later it jointly led a $4bn buyout of the Debenhams department store chain.Reuse content