Wanda Sports Offloads Ironman for $730M After Stock Value Halves

Wanda Sports Group has agreed to sell its Ironman franchise to the owner of publishing house Conde Nast, just eight months after the company controlled by Chinese billionaire Wang Jianlin suffered 2019’s second-worst NASDAQ debut.

The sports and media unit of mainland China developer Dalian Wanda Group, which also owns soccer marketing group Infront, said in a stock exchange announcement that it had entered into an agreement to sell the Ironman Group to Advance Publications in an all-cash deal worth $730 million.

Advance announced separately that Orkila Capital had made an undisclosed co-investment as part of the deal that sees the managing partner of the New York-based private equity firm, Jesse Du Bey, re-joining the Ironman board after an absence of twelve years.

Du Bey had led Providence Equity Partners’ acquisition of the sports company for an undisclosed amount in 2008, with the investment giant going on to sell Ironman to Wanda for $650 million in 2015.

Selling as Events Go Dark

Following the announcement of the sale, shares in Wanda Sports jumped 41 percent on Thursday to reach $2.80, before dropping to $2.35 by the close of trading on Monday.

The company’s share price has more than halved since its July NASDAQ listing, which raised $190 million from an initial public offering that had initially targetted $500 million.

Wanda Sports is offloading Ironman after posting a series of quarterly losses last year, including a loss of €31.2 million ($34 million) for the third quarter – its latest publicly available results.

The outbreak of the COVID-19 pandemic has added illness to injury, forcing the company to postpone or cancel more than 30 upcoming triathlon events, according to an update on the company’s website.

“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,” said WSG’s president and CEO Hengming Yang.

The Wanda executive added that the company will continue to work on expanding its “global sports, media and marketing platform” through its soccer marketing group Infront, as well as through Wanda Sports’ China businesses.

China Events to Continue

Under the terms of the deal with Advance, Wanda Sports will continue to operate the Ironman triathlons, the Rock ‘n’ Roll marathon series, and the Epic off-road mountain bike races in China under an exclusive licensing agreement.

“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,” said Yang.

Wanda Sports said it will use the net proceeds from the sale to repay the principal on a $230 million Credit Suisse facility as well as $50 million outstanding under a promissory note issued to Wanda Sports by Wanda Group. The remainder will be used to fund dividends or share buy-backs, subject to shareholder approval.

Paying off Debts After Weak IPO

Assembled as part of Wanda Group’s overseas acquisition binge that saw the developer rack up billions of dollars in debt, Wanda Sports saw its profits continue to decline last year, which it blamed on IPO-related expenses and financing costs.

The company had said prior to its NASDAQ listing that it would use the funds raised from the IPO to settle a loan which it had taken out to pay off a $350 million promissory note to Wanda Group.

More recently, the firm announced on 15 March that it had taken out a new loan facility with Credit Suisse of $240 million to refinance existing debt.