With so many comments about the sale of WTC to Wanda Group we noticed a post by Anna Cleaver thatstepped back and looked at this from the perceptive of someone who has had experience in mergers and acquisitions. Anna has a background as anÂ Investment Banker / Corporate Finance professionalÂ and based purely off the media announcement she had these thoughtsÂ about theÂ purchase of WTC.
Words by Anna Cleaver
It is not scary or anything unexpected like many of you are saying. Private Equity typically invest in a company for 3 -5 years with the objective of reducing costs, implementing growth on the bottom line and then exiting after that period. So this exit is well overdue.
Key staff usually remain. It seems from the announcement that the acquirer wants management to remain – suggesting it values their experience and expertise in putting on high quality events.
The acquirer in this case likely has synergies with existing businesses it owns and the acquisition is likely consistent with its strategies for the sporting industry which it seems to now play a big part in. If its objectives are for longer term value, it may be a very good thing for the sport. With the scale Wanda Group has, it is likely able to implement some positive changes.
This is preferable to being owned by a Private Equity company who is looking for an exit (and therefore implementing short term performance growth initiatives to make the entity more appealing to potential buyers and increase its exit return).
So not surprising and hopefully a good thing.
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