SBJ/February 15 - 21, 1999/No Topic Name

Infusion of cash has Barber racing ahead

Like the racers and drivers his company trains, Skip Barber felt he needed extra help to get to the next level. So he agreed last week to sell his small but growing company to IMG/Chase Sports Capital LLC, the sports leveraged-buyout fund.

While Barber will remain chief executive, for the first time since he founded the Skip Barber Racing School in 1975, he will have a boss.With Sports Capital's money, Skip Barber Racing plans to expand internationally and to dramatically increase the firm's sponsorship revenues.

The school manages a racing series, trains racing car mechanics and teaches professional and amateur drivers at 20 U.S. tracks.

It is in this last category where Sports Capital expects to grow the business the most.

Part of the school's business is hosting corporate groups and teaching their executives how to drive race cars and high-performance vehicles. Those clients should prove attractive to sponsors such as financial institutions, said Barber, who plans to work directly with Sports Capital backer International Management Group to attract new sponsors.

"The exposure the school gives to a certain demographic group is terrific for a sponsor," said David Moross, managing partner at Sports Capital, which has $140 million committed to its LBO fund.

The school's revenues generated by sponsorships should rise from 15 percent to 25 percent just in the next year, Moross predicted. Right now the school's 15 sponsors are all automotive firms, but the new strategy is to attract all types of companies.

"IMG and David really should give us access to a whole new range of sponsors," Barber said.

The transaction is yet the latest example of the sophisticated money that is now pouring into motorsports. Last year Warburg Pincus acquired part of a Formula One team, and Championship Auto Racing Teams Inc. raised $75 million in a public offering.

With Sports Capital's cash infusion, Skip Barber Racing will begin a rapid series of acquisitions. The first targets will be automotive training companies, but others could soon include many niches in motorsports.

"I want to run a larger company," Barber said.

For those who thought the deal might mark the end of his influential career in auto racing, Barber wants everyone to know he is not going anywhere.

"I am certainly not anxious to go to the beach," said the Harvard graduate and former professional racer.

Of course, he could buy a beach if he wanted to. He sold the company for $25 million to $35 million.

Now the company's fortunes lie with IMG/Chase, which must worry about the future.

Much of the Skip Barber Racing School, however, will not change. Barber and his management team will remain with the school, and there are no plans to change the Barber Dodge Pro Series, a minor league racing series owned by the school.

"I don't see any changes," Barber said. "We've got a zillion opportunities now to pursue what we didn't have the funding for before."

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