Wanda Group, one of China’s leading private conglomerates, has reached an agreement to acquire 100% of IRONMAN for an equity value of approximately US$650 million from private equity firm Providence Equity Partners.
As part of the transaction, Wanda Group will work with the current lending group and assume IRONMAN’s existing indebtedness. The acquisition by Wanda Group heralds ‘yet another landmark investment in the sports sector’ following Wanda’s acquisition of Infront Sports & Media and its investment in soccer club Atletico Madrid.
The transaction fee is below a previously speculated figure of US$850 million. Although, the US$650 million value on the IRONMAN business, and its associated brands, represents a major investment. The US$650 million purchase price excludes IRONMAN’s debt, which Wanda group is also taking on – putting the total consideration in the region of US$850-900 million.
With IRONMAN’s reported EBITDA (earnings before interest, tax, depreciation and amortisation) at around US$50 million, the US$650 million deal is a sizeable x13 multiple on operating earnings.
“Wanda Group’s acquisition of IRONMAN marks another exciting chapter and opportunity for the future growth of IRONMAN after seven very successful years of ownership by Providence Equity Partners,” said Andrew Messick, Chief Executive Officer for IRONMAN.
“Wanda Group is a global-minded organization that shares our desire for excellence and continued growth, particularly in Asia. We are delighted to be part of the Wanda Group family of companies and are excited about the future of IRONMAN as we continue to provide life changing race experiences for athletes of all levels from their first step to the finish line.”
The iconic IRONMAN brand is billed as the largest participation sports platform in the world. Its flagship races are IRONMAN triathlons – 3.9K (2.4 mile) swim, 180K (112 mile) bike and 42K (26.2 mile) run – and IRONMAN® 70.3 triathlons – 1.9K (1.2 mile) swim, 90K (56 mile) bike, and 21.1K (13.1 mile) run.
From its beginnings on the shores of Waikiki Beach on the island of O’ahu in Hawaii in 1978, IRONMAN has organized, promoted and licensed triathlon events for 37 years, and owns five exclusive triathlon brands, operating at least 250 events every year around the world.
IRONMAN is expected to generate US$183 million in revenue in 2015 and has increased revenue at a CAGR (Compound Annual Growth Rate, or average annual growth) of 21% over the past four years. A release notes that, ‘due to its unique business model and proprietary intellectual property, the company is expected to deliver strong continued growth going forward.’
The 2015 acquisitions of IRONMAN and Infront Sports & Media properties have made Wanda Group one of the world’s largest and most comprehensive sports companies. With these new businesses, Wanda Group now has sports sales, media & marketing and operational capabilities on six continents with strong positions in North America, Europe, China, South Africa, Australia and New Zealand.
Davis Noell, Managing Director at Providence Equity Partners said, “We have thoroughly enjoyed our partnership with IRONMAN over the past seven years and are pleased with the company’s growth and operational excellence under Andrew’s leadership. We have great respect for Wanda Group and its leading global sports platform and believe IRONMAN is well positioned to continue its success with their support.”
Wanda Group was founded in 1988 and operates in four key business segments: commercial property, entertainment & tourism, e-commerce and financial services. In 2014, the company’s assets totaled at CNY 534.1 billion (US$86.8 billion) and its annual income reached CYN 242.5 billion (US$39.4 billion).
The company now operates 109 Wanda Plazas, 71 hotels (including 68 five-star hotels), 6,600 cinema screens and 99 department stores. Looking ahead, by 2020, the company aims to develop into a leading Multinational Corporation (MNC) with total assets of CNY 1 trillion (US$163 billion), annual revenues of CNY 600 billion (US$97.5 billion) and net income of CNY 60 billion (US$9.75 billion).
The IRONMAN acquisition should represent a major shift in gear for the M-Dot brand. While it is understood that it will be business as usual for the IRONMAN team in Tampa, Florida – with IRONMAN now part of the rapidly expanding Wanda Group, we can expect to see a flurry of activity for IRONMAN and IM 70.3 in the Asia region in particular. This can help to raise the international profile of triathlon – taking swim/bike/run to the masses in a number of key strategic countries, not least China.