Silver Lake has reached a deal to invest up to $200 million into New Zealand Rugby, which runs the internationally famous All Blacks team as well as domestic leagues. The private equity firm will own up to 8.6% of a new entity that will house all the New Zealand Rugby assets, according to a release from the parties Wednesday afternoon.
The deal comes in two parts. First, Silver Lake invests $134 million (NZD$200) up front into the new business housing New Zealand rugby’s revenue-generating properties at a valuation of $2.4 billion. The cash infusion buys Silver Lake a perpetual convertible note, which can be turned into equity by Silver Lake in three years’ time. Later on this year, Silver Lake will underwrite an offering for New Zealand-based institutional investors of $42 million to $67 million, with the California-based investment firm potentially buying the entire offering depending on domestic investor demand.
At the end of the process, Silver Lake will own at least 5.7% of New Zealand Rugby and as much as 8.6%, which is less than the previously discussed 10% to 15%. The deal has been in the works for close to a year, with New Zealanders wary of allowing U.S. investors into the country’s rugby organization. The New Zealand Rugby Board and the players association have approved the deal. It still needs sign-off from the country’s provincial rugby unions and the Maori Rugby Board.
“This is a pivotal moment for rugby in New Zealand,” said players association chairman David Kirk, in the release. “The agreement provides capital on a sound economic basis and Silver Lake brings additional capability to execute on the new growth opportunities. The proposed investment by New Zealand institutions provides an opportunity and natural pathway for New Zealanders to share in the growth of rugby over time.” New Zealand Rugby will retain control over rugby and commercial strategy under the pact.
The rugby organization and players union also gain a stake in a new Global Rugby Opportunities fund with Silver Lake that will invest in global rugby and rugby-related technology, earning the New Zealand entities a 15% cut of profits.
“Digital technologies are transforming all sports, and we look forward to bringing our global network and resources to help New Zealand rugby drive innovation and take advantage of all the opportunities ahead,” said Silver Lake managing director Stephen Evans.