China's Wanda exits Ironman to strategic, PE buyers

The Chinese company bought Ironman – then known as World Triathlon Corporation – from Providence Equity Partners in 2015 for $650 million. The deal was part of Wanda's broader plan to establish a foothold in the global sports value chain, from event organizing to rebroadcasting. However, in recent years numerous previously acquisitive Chinese corporates have come under financial and regulatory pressure, forcing them to divest some of their overseas assets.

The buyers are Advance, a family-owned business with a portfolio of media properties that includes Condé Nast, and Orkila Capital, a private equity firm that makes growth investments in the media, entertainment and sports sectors. Jesse Du Bey, a managing partner at Orkila, previously led Providence's 2008 investment in Ironman. He will rejoin the company's board.

Wanda Sports will use the proceeds to repay $230 million in debt plus interest due to the lenders and redeem $50 million outstanding under a promissory note issued to Hong Kong-based Wanda Sports & Media. A further portion will go towards funding dividends payments and share buybacks.

The company's stock shed 60% in value during the first three weeks of March, following an announcement that the coronavirus outbreak would have a material adverse impact on business. Wanda Sports, which by that point had already canceled or postponed mass participation events in Asia, identified restrictions on large gatherings and disruptions to the professional sporting calendar as particular threats. Its share price has rallied by 50% since March 23.

The company said in a statement that it would continue to develop its businesses across mass participation, spectator sports, and digital and production. On the mass participation front, it organizes a roster of city marathons in China and will serve as the exclusive licensee for Ironman in the country.

Wanda Group branched into sports under a diversification drive intended to transform it into a service-oriented company with interests across commercial property, culture, financial services, and e-commerce. In 2015, a holding company was set up for sport-related assets. It was one of four divisions under the cultural industry group, alongside tourism, children's entertainment and media.

Ironman organizes more than 235 events in over 50 countries across triathlon, running, trail running, cycling and mountain biking. In addition to the flagship Ironman brand – which attracts one million international athletes to its events every year – the company owns the Rock 'n' Roll Marathon Series and the Epic Series off-road mountain bike races.

"We remain confident in our future; our focus and objectives are unchanged; and we are ready to face the opportunities and challenges ahead. Together with Advance and Orkila, we will navigate through the turbulent and uncertain period in front of us and continue to deliver the exceptional experiences for which we're known," Andrew Messick, CEO of Ironman, said in a separate statement.

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• Topics
• Greater China
• Buyouts
• North America
• Media
• China
• Dalian Wanda Group