By Sonia Andrzejuk, Edoardo Borsoi , Luca Introna, Andrea Zenoniani (Bocconi University) and Dillan Pindoria (University of Nottingham)
Overview of the deal
Acquirer: Public Investment Fund, PCP Capital Partners, RB Sports and Media
Target: Newcastle United Football Club
Total Transaction Size: £305m
Closed date: 07/10/2021
A consortium composed of PCP Capital Partners, RB Sports, and Media, and the Public Investment Fund, the kingdom’s sovereign wealth fund controlled by Crown Prince Mohammed bin Salman, has completed on the 7th of October a £305m acquisition of the English football club Newcastle United.
The takeover, seen by the group as a long-term investment and considered by the leading member of the consortium, the Public Investment Fund, as a way to diversify its revenue from oil, brings Newcastle United among the richest football clubs of the European leagues and gives the club an economic potential difficult to contrast.
The acquisition process has been quite long and difficult for several reasons, among which the fact that the Public Investment Fund is currently chaired by Prince Mohammed who is banned from interacting with the club.
However, after the resolution of the different problems, the deal has been finally concluded, leaving some uncertainties among the supporters of the club and the other clubs competing in the Premier League.
“We are extremely proud to become the new owners of Newcastle United, one of the most famous clubs in English football. We thank the Newcastle fans for their tremendously loyal support over the years and we are excited to work together with them.” - Yasir Al-Rumayyan, governor of PIF
Company Details (Acquirer - Public Investment Fund (PIF))
The Public Investment Fund (PIF) was originally established in 1971 to invest in commercial projects. In addition to making select investments in a range of companies and assets domestically and internationally. The Fund has contributed to the establishment of numerous Saudi Arabian companies, supporting innovation, diversification, and non-oil sector development in the Kingdom. The Fund is building an investment portfolio that is diversified and risk-adjusted across sectors, geographies, and asset classes. All investments are primarily based on economic and financial criteria, with a focus on achieving attractive long-term financial returns.
Founded in 1971, headquartered in Riyadh, Saudi Arabia
Chairman: Prince Mohammad bin Salman Al-Saud
Number of employees: 1,940
Market Cap: N/A (sovereign wealth fund)
Company Details (Target - Newcastle United Football Club)
Newcastle United Football Club is a United Kingdom-based company that operates a football club. The Club issues tickets, such as home tickets, away tickets, hospitality, and stadium tours. It also offers men's and juniors shirts and accessories.
Founded in 1890, headquartered in Newcastle Upon Tyne, UK
Former President: Mike Ashley
Number of employees: 292
LTM Revenue: £152,63m
LTM EBITDA: £7,64m
Projections and Assumptions
The deal results in a sale to the investment group led by the Public Investment Fund (PIF), and also comprising PCP Capital Partners and RB Sports & Media (the “Investment Group”), which has completed the acquisition of 100% of Newcastle United Limited and Newcastle United Football Club Limited from St. James Holdings Limited. The new owner of the club will include a three-way split between a new consortium of:
80% ownership to the Saudi Public Investment Fund
10% ownership to PCP Capital Partners