Bloomberg News is reporting that Wanda Sports Group has “held discussions with some private-equity buyers that expressed interest in the business” and is looking to sell the company for $1 billion.
Wanda is a Chinese company and part of billionaire Wang Jianlin’s “conglomerate” Dalian Wanda Group. The company bought Ironman in 2015 from Providence Equity Partners for a reported $650 million while also taking on a reported $220 million in debt.
Last fall the Professional Triathletes Organisation (PTO) expressed interest in acquiring the Ironman assets – Ironman declined that offer. The PTO renewed the offer earlier this month after announcing that it had a new backer – Michael Moritz and his Crankstart Investments company.
According to Bloomberg, “Wanda Sports shares have dropped about 63% in New York trading since their July 2019 debut, paring the company’s market value to about $409 million. With total debt at about $968 million, the company has an enterprise value of about $1.2 billion, according to data compiled by Bloomberg.”
Those who bought Ironman shares don’t seem likely to come out ahead with all this wheeling and dealing – based on those numbers shareholders would lose money on a buyout. Some of those shareholders already seem to be unhappy with their Ironman investment. At present there are at least two law firms that are embarking on class action law suits against Ironman to “recover damages for Wanda Sports investors under the federal securities laws.”
According to a story posted on endurancebusiness.com last year:
The lawsuit submitted by Rosen Law Firm cites registration statement documentation in the Wanda Sports IPO. This allegedly ‘featured false and/or misleading statements’. The law firm argued that it failed to disclose that:
(1) the lack of major sporting events for its Digital, Production, Sports Solutions (DPSS) and Spectator Sports segments for its second quarter of 2019, ending before the IPO, would negatively impact revenue for the second quarter of 2019;
(2) Wanda Sports had suffered a year-over-year decrease in revenue in its second quarter ended June 30, 2019 and would for its fiscal year 2019, primarily related to lower reimbursement revenues accounted for in its DPSS segment and lack of Spectator Sport segment offsets; and
(3) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.