Warburg Pincus sells Jordan stake

The global private equity firm has sold its 49 per cent interest in the Formula One motor racing team Jordan for an undisclosed sum.

Global private equity firm Warburg Pincus has sold its stake in Jordan, the Formula One motor racing team controlled by Irish businessman Eddie Jordan, for an undisclosed sum.

 

The original deal, led by Dominic Shorthouse, who now heads up mid-market private equity firm Englefield Capital, saw Warburg Pincus invest between £36m and £40m for a 49.9 per cent stake, with Eddie Jordan retaining the remaining 50.1 per cent stake. Weekend newspaper reports indicated that Warburg Pincus would sell its stake at a loss.

 

The investment was made in 1998, at a time when Jordan was among the up-and-coming racing teams in Formula 1. In 1999, the team finished in third place in the team constructors championship, although results have since deteriorated. The team is currently ninth in the 10-team world championship standings.

 

The consortium acquiring the 49.9 per cent stake is being coordinated by Merrion Capital, an Irish stockbroker and corporate finance advisory firm based in Dublin. Last year, the firm advised on the E3.6bn buyout of Irish packaging group Jefferson Smurfit by Madison Dearborn.

 

' would like to thank Warburg Pincus for their support over the past five years, during which time we won four races and finished third in the Championship,' said Eddie Jordan. 'I very much welcome my new partners in Merrion to Jordan Grand Prix and I am very excited to have a stable platform to propel the team to even greater achievements.'

 

Formula One has proved to be a difficult sector for private equity firms. Last year, Morgan Grenfell Private Equity was involved in a court case with the Arrows Formula One team to recover £18m relating to an overdraft it made available to Arrows in September 1999. Morgan Grenfell took a 45 per cent stake in the business in 1999.