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Authentic Brands Group now valued at $4.5b after BlackRock LTPC first deal

ABG is critical first deal for BlackRock as they continue to fundraise with target of $12b for LTPC fund

Authentic Brands Group now valued at $4.5b after BlackRock LTPC first deal

“That deal was right in the middle of our fairway” – “We have good momentum in the market”.

These were the words of Andre Bourbonnais the Head of LTPC at BlackRock when asked about the private equity deal for BlackRock involving Authentic Brands Group.

This was the first deal for BlackRock’s new LTPC fund becoming the biggest shareholder of Authentic Brands Group with an $875m equity investment.

The investment comprises of;

$625m LTPC

$250m co-investment from Singapore’s Sovereign Wealth Fund GIC Private Limited $150m and Jasper Rudge Partners contributed $80m.

Alongside founder James Salter and Management, this deal gives BlackRock shared control of the iconic ABG whose brands include Elvis Presley and Mohammad Ali.

BlackRock will now join existing shareholders; Leonard Green & Partners, General Atlantic, Lion Capital, Simon Property Group, Brookfield Properties and NBA Hall of Famer Shaquille O’Neill.

Important deal for both parties

For BlackRock this was the first deal under their new LTPC fund. As they are still fundraising globally with a target of $12b, it was crucial that this deal went well.

For ABG it sets their value at around $4.5b including existing debt. Additionally, LTPC are willing to remain as an investor for the next 10 years which according to Salter allows the business to grow without having to worry where the next private equity guy is coming from. Salter believes with this security, the company’s earnings could double over the next 3 years.

Those thoughts were echoed by Andre Bourbonnais as he claimed the New York based company will expand geographically and through “better use of technology.”

LTPC future

The ABG deal grants access to a portfolio that includes Sports, Lifestyle, Celebrity, Entertainment and Media sectors; NineWest, Spyder, and Sports Illustrated. ABG also produces nearly $10b in global revenue annually.

LTPC has informed investors that they’re targeting companies with the following criteria;

  • Long track records
  • Produce high cash flow
  • Led by extraordinary management
  • Can grow organically/externally

  • As you would expect due to the major investment, Andre Bourbonnais claims each of these traits were found at ABG.

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