TORONTO - Canada Pension Plan Investment Board has struck a pair of agreements investing in motor sports racing including a deal to acquire 39 per cent of Dorna Sports and a US$400-million financing for Formula One Group.
CPPIB Credit Investments signed a debt agreement with Formula One Group to finance US$400 million of a US$1-billion private high yield loan. The loan matures in 2019 but the projected yield wasn't disclosed in the announcement.
"This transaction is an excellent opportunity for CPPIB to participate in a long-term loan facility with attractive risk-adjusted returns involving an iconic global sports management brand that is superbly positioned for continued growth," said Andre Bourbonnais, senior vice-president of private investments at CPPIB.
Formula One Group holds the race promotion, broadcasting, advertising and sponsorship rights for the FIA Formula One World Championship.
The CPP Investment Board also didn't disclose financial terms of the equity agreement with Dorna, an event management, media and marketing company with global rights to the MotoGP motorcycle racing series.
The agreement is part of a plan to expand Dorna through its acquisition of another motorcycle series, the FIM World Superbikes Championship.
Dorna already has rights until 2036 to organize FIM Road Racing World Championship Grand Prix, also known as MotoGP.
The two motorcycle series will be operated separately, with MotoGP focused on racing prototypes and World Superbike events focused on production machines.
CPP Investment Board will join Dorna's management and European private equity firm Bridgepoint as a partner in the sports group.
Note to readers: This is a corrected story. An earlier version said Dorna has rights to MotoGP until 2016, rather than until 2036.