Bridgepoint Sells 39% Of Dorna To Canadian Pension Group
Bridgepoint Capital, the private equity firm which owns Dorna and Infront Sports and Media, has sold a 39% stake in Dorna to a Canadian pension fund, Canadian media are reporting. According to a report from Reuters, Canada Pension Plan Investment Board reportedly paid 400 million euros for the 39% stake in Dorna, and will join Bridgepoint and Dorna's management - in the figure of Carmelo Ezpeleta - in running the company.
The sum paid for the 39% stake gives Bridgepoint a healthy profit. The UK-based private equity firm purchased Dorna from CVC back in 2006, when CVC purchased the rights to Formula One and were forced by the European Competition Commission to sell the rights to the MotoGP series first. Bridgepoint is said to have paid some GBP 400 million (about 550 million euros) for the 71% stake held by CVC when they took over the company.
the Canada Pension Plan Investment Board is buying into more than just MotoGP, however. With the consolidation of Infront Motor Sports under Dorna, CPPIB now has a stake in both MotoGP and World Superbikes. This sale also provides the rationale for Bridgepoint's decision to bring both series under a single umbrella: not only does it add value to the package on offer to CPPIB, but it also eliminates competition between the two series, allowing both to grow without cannibalizing each others audience and potential sponsors. This, rather than any power struggle between Dorna CEO Carmelo Ezpeleta and Infront bosses Paolo and Maurizio Flammini, is the more important reason for combining the two series. Ezpeleta may have come out on top in that internal power struggle, but it was as a by-product of the proposed sale, rather than as a direct intent.
Though the sale fits the timeframe for a private equity to look for a return on their investment - usually in the medium term between three and five years - and was predicted by the more financially astute media, such as our friends over at Bikesportnews.com, the investment by a pension fund is good news for both MotoGP and World Superbikes. Pension funds tend to make investments for the longer term, and are less concerned with piling on debt on their companies - Dorna is said to have some 400 million euros worth of debt placed upon it by Bridgepoint - and more on generating a reliable and constant return, to help service their pension payments. The sale of part of Dorna will have long-term ramifications for motorcycle racing. Hopefully, those ramifications will be largely positive.