Lord Coe Agency Revs Up £50m Motorsport Deal
The marketing services group which last year snapped up Lord Coe's sports rights business is to acquire one of the global leaders in motorsport sponsorship consulting.
Sky News understands that Chime Communications is expected to announce a takeover on Friday of Just Marketing International (JMI), which arranges commercial deals across Formula One, NASCAR and IndyCar racing series.
London-listed Chime is understood to be paying in the region of £50m for JMI in a deal that will involve placing roughly £25m of new shares with leading City investors.
However, the transaction will cast doubt over the future of the 20% stake in Chime that is owned by WPP Group, the FTSE-100 company headed by Sir Martin Sorrell.
Insiders said on Thursday that WPP would not participate in the share placing, meaning that its stake will be diluted.
A leading media analyst added that the deal might prompt WPP to reconsider its minority position in Chime, which it has held for many years.
Chime will also pay for JMI, which is understood to generate several million pounds in annual profit, partly in cash.
The deal will net a significant windfall for Zak Brown, a prominent figure on motorsport's commercial circuit, who is the boss of - and a minority shareholder in - JMI.
Spire Capital Partners, a US-based private equity firm, owns 60% of the agency, while WPP itself owns about 20%.
JMI's key clients include GlaxoSmithKline, LG Electronics, Unilever and UPS.
It is unclear whether the deal will require the approval of Chime's shareholders, and if it does, how WPP would vote on it.
Chime has made a string of acquisitions and disposals recently, including the purchase of the Complete Leisure Group, which was founded by the London Olympics chairman Lord Coe, last year.
It also offloaded the company's public relations arm, whose founders included the Conservative Peer Lord Bell, and is now focused on advertising, sports marketing and other services.
Chime and WPP declined to comment.