Warburg Pincus has been relieved of its 49.9% stake in Formula 1 team Jordan Grand Prix by a consortium of anonymous Irish investors led by corporate finance and stockbroking group, Merrion Capital. The size of the deal has not been disclosed but the investor is likely to have made a loss on its 1998 expansion stage investment, which was reported to amount to around £36m.
The team’s performance has been in decline since 1999 and Jordan Grand Prix was restructured last year to try and combat financial problems. The sport as a whole faces a difficult future without tobacco advertising revenues and as one of only a handful of independent teams Jordan is struggling to attract the necessary sponsorship deals. Formula 1 has already cost private equity investors dear as investments in the Arrows team and SLEC Holdings, the holding company for Formula One, both went sour.
Irishman Eddie Jordan, who owns the remaining 50.1% of the business, created the formula one racing team in 1990 by. Jordan said: “I would firstly like to thank Warburg Pincus for their support over the past five years, during which time we won four races and finished third in the Championship. Looking ahead, I very much welcome my new partners in Merrion to Jordan Grand Prix and I am very excited to have a stable platform to propel the team to even greater achievements and to proudly wave the Irish flag in Formula 1.”
Last year Merrion Capital advised on Madison Dearborn Partners’ €3.6bn buyout of Jefferson Smurfit and was also involved with the Benchmark Capital-backed public-to-private takeover of alphyra.