OpEx Awards 2018: EQT Partners scores on the ‘source code of sport’

A 'carefully crafted' M&A programme saw the sports statistics group grow hugely, winning EQT the Editors' Award for Europe.

Fans of sports statistics: ever wondered who is counting all those passes? You may be surprised to learn it is the same people – or at least the same company – that is beaming live video footage to fans, gathering data for bookmakers and monitoring games in search of possible match-fixing.

Switzerland-headquartered Sportradar has more than 7,000 freelance sports data journalists on its books and partnerships with sports federations from the NFL and NBA to the German Handball Bundesliga. Its pitch – “the source code of sport” – refers to its positioning at the “intersection of the sports, media and betting industries”.

Using its sixth flagship fund, the 2011 €4.25 billion EQT VI, EQT Partners acquired a co-control stake of around 35 percent in the business from its own EQT Expansion Capital II fund and other minority shareholders in 2014. The enterprise value was not disclosed, but is understood to have been in the region of €400 million. By the time EQT would come to sell the company in 2018 to Canada Pension Plan Investment Board (an investor in EQT VI) and tech investor TCV, it would have an enterprise value of around €2.1 billion.

The value creation programme earns our EMEA Editors’ Award for the way in which it tapped into the innate potential of the business, expanding into adjacent segments, and executing what one of the judges described as a “carefully crafted” M&A programme.

Over the course of EQT’s ownership, Sportradar grew its data “event coverage” so that it was tracking and reporting data on a wider portfolio of sports events (it has now covered more than 400,000 events) in new geographies going deeper into lower leagues. It also diversified its client base, growing beyond its traditional core customers (sports betting operations) to a wider group. These now include sports federations – like the Bundesliga, Germany’s football league – who use Sportradar’s Integrity Services unit to guard against match-fixing and betting fraud, or the International Mixed Martial Arts Association, which uses Sportradar’s OTT (“over the top”) service to stream and monetise video content directly to its fans.

During EQT’s investment period Sportradar’s annual sales grew at a compound annual growth rate of more than 40 percent per year to approximately €300 million during the most recently completed 12-month period. In the same period, Sportradar increased its headcount by 1,400, a rate of 25 percent per year.

In EQT’s own words per its press release at the time of the exit, the company “expanded via several add-on acquisitions and secured a strategic investment by [growth investor] Revolution Growth which led to the formation of dedicated US advisory board comprising Ted Leonsis, Mark Cuban and Michael Jordan. The strong focus on the US market over recent years has positioned Sportradar well to capture the significant growth potential from the opening of the US sports betting market”.

Carsten Koerl, founder and CEO of Sportradar, who will continue to lead the business with EQT as a minority shareholder, described EQT as a “great partner supporting Sportradar in its globalisation and diversification”.