LDC, the leading UK mid-market private equity house, today announces it has invested to support one of the new Formula One (F1) racing teams led by two very successful British firms, Manor Motorsport and high-performance car designer WR Technology Limited (WRT), which will compete for the first time in the 2010 FIA Formula One World Championship.
Manor Grand Prix is an attractive investment opportunity that supports a highly respected UK team with proven, world-leading technical, commercial and racing expertise in one of the most popular international sports. The investment is consistent with LDC’s core investment principles of seeking out unusually attractive market segments, and then backing British business, proven management teams and of continuing to invest throughout the business cycle.
Manor Motorsport has been hugely successful in Formula 3 and has identified and nurtured such future FI champions as Lewis Hamilton and Kimi Raikkonen. Manor beat off fierce competition from as many as 20 entrants, which included some very prominent contenders, to secure Formula 1 entry. WRT, part of the Wirth Research Group of companies, is a UK based internationally renowned car designer with success in both Indy Car (INDY) and the American Le Mans Series (ALMS) cars.
The Manor Grand Prix management is exceptionally talented and highly experienced. The team’s Chairman is Etienne de Villiers, formerly a senior Walt Disney Studios executive, latterly Chairman of BBC Worldwide and the ATP World Tour. Sporting Director John Booth, founder of Manor Motorsport, has 21 years’ experience in motor racing. Nick Wirth, founder of WRT, is a highly skilled race car designer and engineer and has worked with many F1 teams. Graeme Lowdon, the Director of Racing, is a very successful entrepreneur and businessman who orchestrated the establishment of Manor and was key to bringing the current team together.
Together with a unique commercial and sponsorship strategy that is expected to produce strong revenues, this talented team is well-placed to capitalise on the huge commercial opportunities presented by F1. Total revenue for the sport last year was estimated at £3billion. F1 generates more revenue per event than any other sport in the world with each of the 17 races producing turnover in excess of £140million, ten times greater than its closest rival, the NFL. The TV package is a premium source of programming for terrestrial broadcasters throughout the world offering sponsors worldwide audiences of over 600 million viewers per race.
LDC believes that an investment now in a F1 team is most attractive as the governing body, the FIA, has moved to ensure that an already very attractive industry will be made more viable in the future. In August this year a new Resource Restriction Agreement (RRA) was signed, which aims to return costs to the levels that prevailed in the early 1990s. WRT’s unique computer based design and simulation approach is not only proven in the US with its design of INDY and ALMS cars, but is ideally placed to benefit from the RRA whilst many existing teams will have to dramatically reduce their cost bases. This will provide a more level playing field and with benchmark revenues in excess of these restricted spending levels, the prospects of healthy profits and return on investment are excellent.
LDC’s investment is consistent with its investments strategy of focusing on a number of sectors, including design and engineering. Earlier this year, LDC invested in NES Limited, an engineering solutions group focusing on the marine defence and other specialist industrial sectors. Other LDC investments in these sectors include CMG, which supplies products to the construction, rail, marine, petrochemical and machine tooling markets; and Omega Red Group, which is the UK market leader in electronic earthing and lightning protection.
LDC is proud of its record of supporting outstanding management and the UK’s design and engineering talent and winning teams across every sector and this investment is the latest example of that commitment. Manor Grand Prix is creating more than 100 new jobs, 45 of those at the race operations facility in Dinnington, South Yorkshire and 60 at WRT in Bicester.
The deal is LDC’s 14th in 2009, bringing cumulative investment to £184million in businesses with a total enterprise value in excess of £500million.
Etienne de Villiers, Chairman of Manor, commented:
“Everyone involved with the Manor Grand Prix team is delighted to be entering F1 at such an exciting time for the sport. From a very solid engineering base we are looking forward to establishing strong commercial partnerships and an exciting and innovative marketing strategy that will ensure our team makes a very significant contribution to the sport and its immense fan base.”
Darryl Eales, CEO of LDC, commented:
“Manor represents the combination of a great management, racing pedigree and world class engineering and design; in a unique market segment and in one of the world’s most popular sports. LDC has a heritage of backing British design and engineering talent and supporting winning teams across every sector. This investment is consistent with our regional focus and management orientated approach.”
NOTES TO EDITORS
Lloyds TSB Development Capital (‘LDC’) www.ldc.co.uk
LDC (Lloyds TSB Development Capital) is part of the Lloyds Banking Group and is authorised and regulated by the Financial Services Authority.
LDC has, since 1981, completed over 400 investments, has ongoing interests in over 60 businesses across the UK.
LDC back ambitious management teams from UK-based companies seeking between £2m and £100m of equity for management buy-outs, institutional buy-outs or development capital transactions.
LDC invests in a broad range of sectors and has particular experience in financial services, healthcare, industrials, IT & software, leisure & media, retail & consumer, and support services.
LDC is the leading private equity company in the UK mid-market. Recent transactions include investments with 1ST – The Exchange, Ansa / Independent Inspections, Evander Group, Cranswick Pet & Aquatics, Modelzone, Nuclear Engineering Services Limited, Quantum Specials, and Snell Limited plus exits from ATP, ghd and Telecom Service Centres.
LDC has fourteen offices – Aberdeen, Amsterdam, Birmingham, Bristol, Edinburgh, Hong Kong, Leeds, Liverpool, London, Manchester, Newcastle, Nottingham, Reading and Southampton.
WRT
WRT was founded by former owner of the Simtek Formula One team and chief designer for the Benetton Formula One team, Nick Wirth. The company and its subsidiary Digital Flow Solutions are a very successful UK Research Technology company specialising in the design and implementation of High Performance Cars and Race Simulators. Providing designs for both sports cars and F1 cars, Wirth Research is the company behind Honda’s highly successful American Le Mans Series Acura prototype. Nick Wirth has also worked with Honda in the Indy Car series and other leading car manufacturers.
Manor
Manor Grand Prix Racing Limited (Manor), founded in 1990 by former champion John Booth, is a British motor racing team which will compete in the 2010 Formula 1 World Championship following a successful track record in Formula 3. Throughout its history the team has primarily competed in Formula Renault, with past drivers including 2007 Formula One World Champion Kimi Räikkönen, 2008 F1 World Championship winner Lewis Hamilton as well as other Formula One drivers such as Antônio Pizzonia. From strong beginnings in Formula Ford and Formula Renault, Manor moved into the Formula 3 Euroseries in 1999. The team’s achievements include 19 drivers’ and constructors’ championships and 170 race wins as well as the accolade of most successful Formula Renault team in Europe.