Lagardère, the France-based media powerhouse, has announced plans to sell 75% of the Lagardère Sports agency to H.I.G. Capital, the Miami-based private equity and asset management firm. The sale projected to close before the end of the first quarter of 2020, would bring an end to the extensive search for a buyer of Lagardère’s sports division that started around February 2018.
Lagardère announced that Monday, December 16, 2019, they received an offer from H.I.G. Capital to purchase its sports division for approximately €110 million. Lagardère said that the €110 million valuation “does not include the future value creation potential of the Group’s residual 25% interest in Lagardère Sports, or any potential gains from the Confederation of African Football agreement.”
Lagardère added: “The Group anticipates recognizing a write-down estimated at between €210 million and €240 million, notably deriving from the unilateral cancellation of the Confederation of African Football’s (CAF) agreement.”
The CAF has terminated the 12-year agreement, which covered the sale of its media and sponsorship rights internationally from 2017 to 2028 and was worth $1 billion (€890m), in what Lagardère last night described as a “unilateral decision” that was “unlawful, unreasonable and unjustified.”
Before CAF’s move to terminate its contract – Arnaud Lagardère described analysts’ valuations of the sports division of between €200 million and €300 million as “quite low” and said he aimed “to go much higher than that.” It is estimated that the company lost between €160m and €170m in value, by losing that contract.
Lagardère said that the €110 million valuation “does not include the future value creation potential of the Group’s residual 25-per-cent interest in Lagardère Sports, or any potential gains from the Confederation of African Football agreement.”
Lagardère Sports’ U.S division represents many of the best current and former football players. The roster currently features over 70 NFL Players, including 26 who have received Pro Bowl honors and 13 players who have been named All-Pros. The baseball division has represented more than 100 Major League Baseball players and has a long, successful history of representing some of the best players in the game. The agency also provides representation in coaching and broadcasting.
The group plans to keep its entire interest in Lagardère Live Entertainment, the branch of the company that produces music shows and live entertainment in France. Until now, the Live Entertainment fell under the Sport and Entertainment category. Lagardère Live Entertainment is valued at just over €40 million.
Some other notable potential suitors for the company were Wasserman, the sports marketing company and talent agency, and Mediapro, the Spain-based production and media rights group.