Formation sells showbiz and sports divisions in £20m deal
FORMATION, the AIM-listed property and investment company today severed ties with its roots as it sold its sports management business Proactive, in a £20.75m private equity deal.
Formation’s boss Neil Rodford is leaving to join the new venture, called James Grant Group, which is backed by Gresham Private Equity.
Formation will receive £16m in cash, while the new business will assume a £5m liability owed historically to the shareholders of James Grant group.
The five businesses included in the transaction are: James Grant Media Ltd, O J Kilkenny & Co Ltd, Proactive Sports Management USA Inc, Formation Sports Capital Ltd and Proactive Sports Management .
These businesses represent A-list celebrities including Ant & Dec, Bryan Adams, Lily Allen, Sir Bob Geldof, Vernon Kay, Piers Morgan, Oasis, John O’Shea, Lesley Vainikolo and Holly Willoughby.
Philip Schofield is a client and shareholder. The Sports Capital business deals with many UK Premier League football clubs as well as other high profile clubs across Europe.
Cobbetts Manchester corporate team advised Gresham Private Equity on the deal. Zeus Capital advised Formation.
Hale Barns-based Formation was previously known as Proactive Sport Management. It was created by football agent Paul Stretford and former Manchester United star Kevin Moran was a director.
Mr Stretford is no longer involved with the company.
In recent years the company has focused on property, investment and wealth management.
John Lawrence, non-executive chairman, of Formation, said: “It is the view of the independent directors that the agreed offer represents an excellent opportunity for the group to realise value.
“The cash value for the disposal subsidiaries is equivalent to approximately 7.47p per share representing a premium of 35.83% to the company’s current market capitalisation and will enable the group to focus upon its property management and IFA businesses in a concerted manner.
“These are challenging times within both the property and financial services sectors. As a debt free, cash positive business, the recommendation to shareholders to accept this offer will, we believe, better equip the Group to tackle these challenges.”
The Cobbetts team was led by corporate partner, Sean FitzGerald, who was assisted by partner, Adam Kaucher, associate Victoria Zivkovic and solicitor Laura Lovell.
