Manchester City's parent company valued at $4.8 billion after investment by US firm

Valuation is a record for a sports group as $500m deal gives Silver Lake 10 per cent stake in City Football Group

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American technology investment firm Silver Lake will put $500 million into the City Football Group, the parent of Premier League champions Manchester City, giving the company a $4.8 billion value.

The valuation is a record for a sports group.

Silver Lake will have a more than 10 per cent share of the group following the investment.

Khaldoon Al Mubarak, the chairman of City Football Group, said the agreement will support its long-term growth and help the creation of new revenue streams around the world.

"We and Silver Lake share the strong belief in the opportunities being presented by the convergence of entertainment, sports and technology,” he said.

City Football Group has shareholdings in seven clubs around the world including Japan's Yokohama Marinos, Uruguay's Club Atletico Torque, Spain's Girona, New York City FC and Melbourne City Football Club, as well as owning the English side. Most recently, in February, the group bought into Sichuan Jiuniu FC, in China League Two.

 

 

Silver Lake has $43bn in combined assets under management and committed capital. Its portfolio includes investments in Chinese ride hailing platform Didi Chuxing and US media, entertainment and sports content and rights company, Endeavor.

After the deal with Silver Lake, Abu Dhabi United Group, owned by Sheikh Mansour bin Zayed, the Deputy Prime Minister and Minister of Presidential Affairs, will have a 77 per cent stake in City Football Group, down from 87 per cent, and 12 per cent will be held by a consortium of Chinese institutional investors led by CMC, which previously had 13 per cent of the company.

However, shareholders did not sell any of their equity as part of the deal, a statement from City Football Group said.

The money from Silver Lake will be used to fund international growth and the development of technology and infrastructure assets, it said.

The $4.8bn figure that the deal puts on City Football Group represents an impressive increase in value for its owners since Sheikh Mansour made his initial investment in Manchester City a little more than a decade ago. In 2015, the Chinese consortium bought into the group in an agreement that valued it at $3bn.

KPMG has estimated that Manchester City's enterprise value alone could be as high as €2.5 billion, as of January 1 2019, making it the fifth most valuable football club in Europe behind Real Madrid at the top with €3.3bn. Manchester United (€3.3bn), Bayern Munich (€2.7bn) and Barcelona (€2.7bn) are also ahead of City. New York listed Manchester United's market capitalisation is currently about $2.7bn but its shares have fallen by more than 11 per cent, year to date.

Last season Manchester City swept up six trophies in the domestic men's and women's games and earlier this month the football club reported its fifth consecutive year of profitability under Abu Dhabi ownership.

 

 
 

 

Egon Durban, Silver Lake's managing partner, who will have a seat on City Football Group's board, said that it had "built an impressive global platform of marquee football clubs across five continents".

"We are excited to...help drive the next phase of CFG’s growth in the fast-growing premium sports and entertainment content market,” he said.

The deal is subject to customary closing conditions including regulatory approval in some territories.