IMG/Chase Fund Hits Green Flag for Deal –

Although it has yet to have a first close, IMG/Chase Sports Capital Partners last month agreed to acquire its first company. The fund, co-managed by International Management Group (IMG) and Chase Capital Partners, likely will complete its acquisition of Skip Barber Racing School, a trainer of professional and amateur race car drivers, at the end of this month.

According to terms of the agreement, IMG/Chase Sports will pay between $25 million and $35 million for the company, based on the fulfillment of certain performance incentives. “Our whole view of this business is it is very well managed, and we wanted to keep Skip Barber on,” said David Moross, a managing partner of the joint venture. While negotiating the deal price, Mr. Moross said the seller was asking for more than the fund offered, and they agreed to the incentive plan to ensure that interests were aligned. Mr. Barber will retain an undisclosed stake in the company.

Financing for the acquisition has yet to be determined, although Mr. Moross said a number of institutions, which he declined to name, had committed to providing senior debt.

Using Chase’s Capital to Bridge the Gap

Although IMG/Chase Sports Capital has yet to hold a first closing, Chase Capital Principal Jonathan Lynch said Chase Capital would provide equity should the deal close before the fund; the fund would then buy back the school from Chase Capital. Mr. Lynch said he anticipates a first closing for the fund at the end of this month, although he declined to disclose the amount.

Skip Barber Racing School, based in Lakeville, Conn., is the world’s leading trainer of professional and amateur race car drivers. The company has nearly 400 employees, 225 vehicles and operates 30 racetracks throughout the U.S. Mr. Moross and Mr. Lynch both declined to provide revenue information for the school, but a source familiar with the transaction pegged the company’s annual revenue to be in the range of the purchase price.

IMG/Chase will look to grow the company through both internal and external expansion. According to Mr. Moross, the group might look to acquire additional racing schools, both in the U.S. and in Europe, and also will leverage IMG corporate contacts in order to attract sponsorship for the company’s events.