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Sports and entertainment powerhouse IMG — the crown jewel of the late Teddy Forstmann’s empire — is shaping up to be one of the most sought after pieces of banking business this year.
“It’s sports, it’s big brands, it’s a big price and there’s scarcity value,” said one major media banker, who is watching the sales process with much interest.
The first round of interviews with as many as 20 banks ended two weeks ago. A second round of pitches will kick off shortly with the list of contenders narrowed to about five.
Goldman Sachs, which represented IMG’s 24-Hour Fitness gym chain and ENK Holdings, a trade show company, appears to have the inside track. Goldman declined to comment.
Others vying for the assignment include: JPMorgan Chase; Morgan Stanley; Jeff Sine and Joe Ravitch’s Raine Group; and Aryeh Bourkoff’s LionTree Advisors.
IMG is expected to fetch between $2.5 billion and $3 billion, sources said.
The firm owns the rights to numerous sports and properties such as Wimbledon, and represents top athletes and models including supermodel Kate Upton and tennis pro Novak Djokovic.
The sale is expected to draw interest from entertainment agencies Creative Artists Agency and William Morris Endeavor.
Other potential buyers include India’s Reliance Industries and private-equity firms such as Providence Equity, which is aligned with former News Corp. executive Peter Chernin.
The auction for Phil Anschutz’s AEG, which ended abruptly last month when the billionaire pulled it off the market, is whetting appetites for big sports and entertainment plays.
AEG owns several sports teams, including hockey’s Los Angeles Kings, as well as a minority stake in the Lakers. It also owns or operates more than 100 arenas and stadiums world-wide.
The sale of IMG has been rumored ever since Forstmann’s death in 2011. The company is only now pushing ahead with the process, and there is still internal debate over the best course of action.
Akin Gump lawyer Mark MacDougall, who was a close friend of Forstmann’s, is in charge of the sale, which also involves the winding down of the final Forstmann, Little fund that houses IMG.
MacDougall has been sharing very little information with participants, preferring to play his cards close to the vest, sources said.
“IMG is considered by many to be a set of trophy assets,” said Lisbeth Barron, head of media and entertainment at Berenson & Co.
She said it could command a multiple of more than 12 times Ebitda, or earnings before interest, taxes, depreciation and amortization. IMG’s annual revenue is estimated at $200 million.
Forstmann, who died at 71 after battling brain cancer, acquired the firm for $750 million in 2004.
“Everyone is circling,” said one source. “There is no choice but to sell, the company is owned by the heirs and they care about money.”