McLaren Selling a Minority Stake to Investors

It has recently been revealed that the famous British racing team McLaren is selling a minority stake to investors. MSP Sports Capital, whose partners have had a widespread involvement in Major League Baseball, European Football and American Baseball; are all leading a group that will inject £185 million into McLaren Racing

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With McLaren selling a minority stake to investors, this deal is expected to value them at £560 million after the installments of £185 million in equity. As McLaren also participates in the INDYCAR championship in the US, sources have stated that the association members include The Najafi Companies (who are a private investment firm) and UBS O’Connor (who are a hedge fund subsidiary of the Swiss investment banking titan).

With such a major agreement coming underway, part of the deal is that one of the consortium’s principals, Jahm Najafi, will become a vice-chairman of McLaren Racing. Rodrigo Trelles Zabala of UBS O’Connor and Jeff Mooran of MSP will also join the McLaren Racing board where their titles will be known as non-executive directors.

Bruce McLaren is known to be one of the most famous names in British Motorsport since it was founded in 1963. In total, the McLaren team have won 180 grand prix, the Le Mans 24 hours on its debut and not to mention three Indianapolis 500’s. Bruce himself also won the constructors championship eight times in total, while drivers included at that time were Alain Prost, Lewis Hamilton, Mika Hakkinen and Ayrton Senna.

The sale of a minority shareholding is expected to provide sufficient funding to assist McLaren competing for F1 drivers in the years ahead. With the annual budget cap starting at £145 million for each team being introduced next year, McLaren should be able to function at the level of the cost cap. The capital-raising generates a broader attempt to refinance the company as it continues to recover from the global pandemic as the company had a loss of 1,200 jobs across its different units, which negatively affected more than a quarter of its workforce.

The news of McLaren selling a minority stake to investors caused quite a flurry in the industry, as only nine months prior, we saw McLaren descending into Paul Walsh, who was the heavyweight former boss of Diageo.

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