IMG's Pyne Outlines Possible Sales Process For Company
April 4, 2013 08:17 AM
During the opening panel on Day 1 of the 2013 World Congress of Sports, Pyne said the sales process will take longer than people think. The first step will be hiring a bank.
“They have to execute,” Pyne said. “They have to close.”
The sale has been expected ever since Forstmann Little acquired IMG for $735 million in 2004, and speculation around a sale increased after the firm’s founder, Ted Forstmann, died in 2011. The private equity firm has bought and sold 39 companies since its inception in the 1980s, and it typically sold those companies after five years. The longest it ever held a company was nine years, Pyne said, and it is in its ninth year of owning IMG.
Pyne said that IMG executives won’t be involved in the sale, but he did say that he felt good about where the company stands as the sales process begins.“We’re a market leader in almost every business we’re in,” Pyne said. “We’ve had three years of double-digit earnings growth, and the company is in good shape.”
Pyne said he doesn’t think Phil Anschutz’s failure to sell AEG will affect IMG’s sales process because AEG and IMG are different companies with different assets and business models.
“I don’t think (AEG’s non-sale) impacts it one way or another,” Pyne said. “They had high expectations, a 20 multiple. It was a real estate company that had sports assets. It used real estate to derive service businesses. I don’t think it matters.”
Pyne said the sale will be a relief for him. He expects IMG to follow in the tradition of other companies once owned by Forstmann Little, such as Gulfstream and Dr Pepper, which continue to succeed in the aerospace and soft drink industries.
“There’s been a lot of speculation over the last several years at IMG,” Pyne said. “For me, it has been the equivalent of intellectual waterboarding, and I am looking forward to an objective result ... because there won’t be any more speculation as to what value has been created and what’s going to happen.”