NOVEMBER 22, 1999
Richards talks Formula 1
DAVID RICHARDS has announced that he has sold 49% of Prodrive to venture capitalist company Apax Partners with the intention of using the money raised to expand the company's activities to create a more stable business. It is his intention to double the company's business prior to a flotation within the next two to four years. The financial details of the deal have not been announced but Prodrive was aiming for profits this year of $6.5m and with assets of around $12m it is believed that the company is valued at between $100m and $120m. In order to secure a 49% shareholding Apax will have had to pay a minimum of $50m. As a result of the deal Apax director Tim Wright will become a member of the Prodrive board of directors.
Prodrive is currently made up of three divisions. The Motorsport division is the driving force while the Sales division uses the reputation gained in competition to generate income and the Engineering division applies the technology learned in competition to create research and development programs for car companies. The company currently employs 400 people on its 9-acre site next to the M40 motorway at Banbury, in Oxfordshire.
In order to double the company's turnover, Richards needs to expand into new areas and as Formula 1 is the most profitable of all motorsport activities it is logical that he will take this path, although he has also mentioned the possibility of an involvement in NASCAR and in the World Superbike Championship.
The Prodrive organization is already involved in the World Rally Championship - running the factory Subaru team - and in the British Touring Car Championship in which it is running the factory Ford operation. In recent months it is rumored to have been involved in talks with the Ford Motor Company about the possibility of taking over all of Ford's competition activities. This deal makes a great deal of sense for Ford as it means that the company does not have to make the capital investment necessary to build and maintain the necessary teams and facilities. This concept of "out-sourcing" is attractive to big companies as it cuts the overall costs of motorsport without reducing the possibilities of success.
While Ford is an obvious target for such an approach, it may also be attractive to other manufacturers. Richards has close links with the Malaysian car company Proton and with the Petronas oil company and it is possible that he could reach an agreement to run all the company's international sporting activities - which would greatly enhance the country's reputation around the world as a technological nation.
It is worth noting that within the last 10 days Tom Walkinshaw of Arrows has publicly denied any direct talks with Richards although Arrows in the obvious target as a means of getting one of the 12 entries in F1. If he is trying to do a deal with Ford - rather than with the Malaysians - it could be that Richards will bid for Stewart Grand Prix.
Apax has shown an increasing interest in F1 in recent months. Barbara Manfrey, one of the Apax directors in Britain, visited the Belgian GP in August and the company has been in negotiation for some months with David Hunt of Team Lotus. Apax has some experience in motor racing having been involved in the flotation of Brands Hatch Leisure.
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