ALK and Burnley FC’s Alan Pace outlines football’s attraction for PE firms; Finance M&A deals stack up

'The Premier League is a cultural and financial behemoth and offers a great base to implement your own ideas and expertise,' according to Alan Pace, managing partner at ALK Capital.

Good morning Eurohubsters, Craig McGlashan here with Thursday’s Dealflow.

Private equity investment in European football has been a theme we’ve covered extensively over the last few months. But while most of those deals have focused on some of the biggest names in the game, such as RedBird Capital’s takeover of Italy’s AC Milan, one of the earlier deals involved a team that has only been crowned national champion twice – most recently in 1960.

Feel the Burnley. There were more than a few raised eyebrows when in December 2020, Velocity Sports Partners, the sports investment arm of New York-based private equity firm ALK Capital, paid a reported £200 million ($225 million; €230 million) for an 84 percent share in Burnley Football Club.

Though the team was a founding member of England’s league system and in its fifth consecutive season in the Premier League, the country’s top tier, it was far from having the star status of some of its larger competitors, and is now in the second tier of English football.

I caught up with Alan Pace, managing partner at ALK Capital and chairman of Burnley FC, to find out why private equity has become so interested in European football and what made Burnley itself attractive.

You can read the whole interview here – including on how the team is coping with relegation from the top flight and how revenues will be affected by the cost of living crisis.

But here’s a snippet of Pace discussing the attraction of football teams – and Burnley in particular.

“The Premier League is a cultural and financial behemoth and offers a great base to implement your own ideas and expertise which is what we quickly established at Burnley FC during our first season as club custodians,” he told me. “But English football in particular is something special when it comes to world sport and I think that ready-made fanbase and built-in passion for the sport and for the clubs is something that really attracts.

“We felt Burnley FC was a club with a rich history, tradition and fanbase that had a lot of room to grow and expand. It’s a special club as a founding member of the Football League and in a part of the country where the town turns out to watch the team every weekend in a football hotbed. We want to become England’s favourite underdog club and build the club’s profile and offering.”

Prescription. We’ve seen quite a few pharma related deals over the last few weeks, so PE Hub Europe’s Nina Lindholm has compiled a list of some of the standouts.

You can check out Nina’s breakdown here, which includes deals involving the likes of TPG, Inflexion and LDC.

Paying off. I wrote on Monday about Copper Street Capital’s exit from Italian payments company Satispay. That day’s Dealflow also featured comments from Copper Street founder and executive chairman Jerry del Missier, who told me that the payments sector “is nowhere near done in terms of the impact on the financial services industry”.

Well, del Missier looks pretty prescient as there was another deal with a payments angle a couple of days after his comments.

The Riverside Company announced that it had invested in Newbridge Software, a cloud-native electronic-point-of-sale software company. Newbridge works with standalone and group operators in the hospitality industry to help manage their bars and restaurants across the UK.

The deal is an add-on to Riverside’s Guestline platform. Newport, Wales-based Newbridge will operate as a separate division within the Shrewsbury, England-based Guestline Group. Riverside has invested in more than 220 software and IT companies since its inception in 1988. The firm has been invested in Guestline since 2016.

You can read more about the deal here.

Banking. As mentioned, we’ve written quite a bit this week about finance related M&A deals and more could be on the horizon.

Monte dei Paschi di Siena – headquartered in Siena and the world’s oldest bank – is set to restart talks with potential buyers after it finishes a €2.5 billion share sale next month, according to sources spoken to by Reuters.

Striking a deal. Finally, Stamford, Connecticut-headquartered cigarette maker Philip Morris International today raised its buyout offer for Swedish Match, a tobacco company headquartered in Stockholm.

The US firm raised its offer to Skr116 per share from Skr106 per share and said the new offer would be its final one. It values the company at around Skr176 billion ($15.6 billion; €16.0 billion).

That’s it from me this week – Nina Lindholm will be with you tomorrow for Friday’s Dealflow.

I’ll speak to you again on Monday.