A Chinese consortium led by Beijing Baofeng Technology and China Everbright Securities has bought a controlling stake in sports media rights agency MP & Silva, underscoring the country’s growing appetite for sports assets globally.
The deal for a 65% share holding values the Italian-owned firm at just over $1 billion, one person familiar with the matter told FinanceAsia.
MP & Silva distributes sports programming to more than 200 broadcasters in 215 countries, including French Open tennis, Formula 1 racing, and leading European and US football league matches, according to its website.
Everbright Securities, a large domestic brokerage, and Baofeng, a Shenzhen-listed internet entertainment and technology company, acquired the stake through an investment fund that the two established with other Chinese investors, Baofeng said in a statement on Tuesday.
The transaction is the latest in a growing line of Chinese investments in global sports, notably football. Having accounted for just 0.64% of Chinese GDP in 2014, sport is becoming increasingly important to Chinese ambitions as the country flexes its financial muscles in search of top-quality assets.
Chinese property-to-entertainment conglomerate Dalian Wanda alone last year bought a 20% stake in Spanish football team Atlético Madrid for €45 million ($52 million), Infront Sports & Media, one of MP & Silva’s main competitors for €1.05 billion, and the World Triathlon Corporation, the largest operator of Ironman triathlon events, for $650 million.
The MP & Silva takeover also comes days after little-known Chinese tycoon Tony Xia paid £60 million ($88 million) to buy English football club Aston Villa.
"Sports are an industry which has a strong vitality…Baofeng is keen to work with the world’s best industry players to enhance its content and service ecosystem," Larry Feng, chief executive of Baofeng, said in the statement.
Separately, a spokesperson for Baofeng told FinanceAsia that the two companies will collaborate in managing sports media rights, relevant consulting services and sponsorships, to “help both develop in China and globally.”
Baofeng also plans to launch its owns sports platform Baofeng Sports in June, which is expected to work closely with MP & Silva and will focus on online sports videos. Le Sports, the sports arm of Baofeng’s main domestic rival LeEco, has been growing fast in recent years and raised Rmb8 billion in its Series B round of financing in late March.
Set up in 2004, MP & Silva's revenues for the year ended June 2015 were $600 million, according to its website. Italian co-founders Andrea Radrizzani and Riccardo Silva previously owned a combined 80% of the company, while a third co-founder Carlo Pozzali was a minority shareholder.
Beijing-based Baofeng, whose name means storm in English, mainly provides online video entertainment services and is now also a maker of virtual reality goggles.
The company has been under the glare of the media spotlight ever since its March 2015 debut on ChiNext, Shenzhen’s Nasdaq-style and technology-friendly board. Baofeng's share price advanced by the daily 10% maximum in 55 out of 124 trading days last year, according to data provider Wind Information. The stock is one of the best-performing Chinese stocks in 2015, when it gained 1,440%.
Baofeng's share price advanced another 8% to Rmb69.15 on Tuesday.
Its financial advisers on the acquisition are CICC and DealGlobe while UBS advised MP & Silva.