Investindustrial takes bite of Eataly; Monroe Capital tees up football and rugby deals

Gordon Saint-Denis, managing director, head of sports finance at Monroe Capital, is confident that the influx of private money into European football will continue apace.

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

We’ve got the Bank of England’s rate decision here in the UK later today – something that could have an impact on after-FX valuations for UK assets, as we discussed earlier in the week. It’ll be interesting to see whether it matches the Fed’s 75bp hike last night – and if share prices will mimic the US by dropping in the aftermath. Away from that, we have a couple of deals to report and some European sports pipeline news.

Tasty deal. Investindustrial announced that it has signed an agreement to acquire a 52 percent stake in Eataly, the Italian marketplace chain, for €200 million. The existing shareholders Eatinvest, the Baffigo/Miroglio family and Clubitaly will own the rest of the company.

Eataly, headquartered in Alba, promotes and sells food marketed as ‘Made in Italy’. It has been in operation for almost 20 years and has locations globally.

Investindustrial’s investment will allow Eataly to retire net financial debt and free up capital for the group’s global expansion plans.

Plugging in. ICG Infra announced the completion of a €240 million investment in Zeplug, a French provider of electric vehicle charging services in multi-occupant and office buildings.

The company, headquartered in Paris, will combine with ICG Infra portfolio company and fellow Parisian Bornes Solutions as part of the deal. Bornes Solutions installs charging stations in multi-occupancy residencies. The combination of the two companies is part of a move to consolidate Zeplug’s position in the French market.

Zeplug will use the capital raised from ICG Infra to accelerate its growth in Europe and the US.

Pick up the pace. We’ve been writing a lot lately about the influx of private equity money into European football but I was interested to find out that there’s also money coming into sport of the oval-ball-shaped variety.

Gordon Saint-Denis, managing director, head of sports finance at Monroe Capital, told me yesterday that his team is looking at a rugby acquisition, as well as working with a football team in the English Premier League on a recap and a German football team on a stadium financing.

While he couldn’t provide more details on those deals, Saint-Denis was confident that the influx of private money into European football will continue apace – not least because Monroe wanted to hire him.

Saint-Denis has worked in sports finance for around 25 years, principally in US sports, but at a previous institution worked on the Glazer family acquiring Manchester United and did some work with Liverpool FC through Fenway Sports Group, as well as some advisory work for FC Barcelona and some work with Arsenal.

“I joined Monroe about four or five months ago to basically start up a formal sports business,” he told me. “They had looked at a number of deals over the years. Obviously, a lot of institutional money has been coming in into the space both on the equity investing side and on the debt side and it was an area where there was a lot of interest, so we’re looking at things across the board.”

The end of the transfer window, the period when football teams are allowed to buy and sell players, is also sparking activity.

“Over in Europe, we’ve been pretty active in some dialogue,” he said. “With the transfer window, it’s amazing how after it closed there’s quite a bit of velocity, with teams looking to take the receivable that they have on the balance sheet and monetise that and get some cash as we potentially head into an economic downturn.”

That potential slump and the associated cost of living crisis will hit revenues in sports but in some respects, the sector will be insulated, said Saint-Denis.

“It’s something we’re looking at both in North America and Europe,” he said. “It’s a little different in North America with respect to the model and the contractual revenue streams. Looking at Europe, you still have a lot of those contractual revenue streams from media rights and other sponsorship stuff as it relates to fans coming to the game. I went back and read a few studies. There’s definitely going to be an effect for the marginal fan, where it’s a decision on whether or not to buy a certain amount of stuff from the market or go to a game.

“But quite a bit of the revenues are contractual and you’re definitely going to see some type of correlation in the transfer window. You saw it during covid – the amount of transfers and the dollar volume went down dramatically, then bounced back quite a bit this year.”

Speaking of differences between Europe and North America on sports though, the biggest might be in fan behaviour – something Saint-Denis saw first-hand. On one deal for a team he worked on years ago, one person in the UK “refused to work on the deal because he was a fan of that team’s rival”.

“I didn’t really get it,” he added. “Now I get it a little more. The passions run deep.”

Monroe Capital provides private credit to borrowers in the US and Canada and has $13.8 billion of committed and managed capital. The firm is headquartered in Chicago.

That’s it from me – Nina Lindholm will be bringing you the final Dealflow of the week tomorrow.