McLaren sale shatters records as team valuation soars

The sale of a minority stake in McLaren Racing has seen the value of the team reach unprecedented levels.

MSP Capital Partners sold its stake in the organisation in a deal that was reported to value the squad at £3billion ($4.01bn). However, PlanetF1.com can confirm the transaction values the team at in excess of £3.74billion ($5bn).

Ruin to riches: Biggest return in the history of sport

MSP Capital partners played a pivotal role in securing McLaren’s future during a turbulent period for the squad in 2020.

It initially acquired a 15 per cent stake, which rose to 33 per cent by the end of 2022.

Yesterday, it divested that interest to Mumtalakat and CYVN Holdings.

When MSP initially invested, McLaren was valued at £560 million, with sources with knowledge of the deal confirming to PlanetF1.com that it marked a ten-times return on investment.

That’s believed to mark the largest return for an institutional investor in the history of sport.

Following MSP Capital’s exit, Mumtalakat and CYVN Holdings have complete ownership of the organisation, the latter holding a non-controlling interest.

It marks the end of a key player in McLaren’s history, with its investment arguably saving the squad from collapse.

In 2020, global restrictions hit McLaren Automotive hard. Sales volumes fell significantly as the pandemic took hold while a significant drop in first quarter earnings saw around 1200 jobs cut from across the broader McLaren Group, around 70 from the Racing division.

Programmes within the automotive sector were cut to save money, and other efficiencies were found worth around £75million. Even still, the organisation needed around £300million worth of additional funding.

In June 2020, it was announced that McLaren intended to raise £275million by borrowing against its impressive Woking headquarters, and its heritage collection, an act which saw court action taken as creditors attempted to block the move, arguing it had already been used to secure other debts.

It marked McLaren’s lowest ebb as it threatened to push the business into insolvency.

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Crisis was averted courtesy of an unsecured £150million loan from the National Bank of Bahrain (which is owned by Mumtalakat) and the McLaren Technology Centre was sold for £170million on a lease-back agreement. Combined, it saw an injection of a critical £320million into McLaren Group, saving it from extinction.

As that transpired, Zak Brown entered the market seeking investment specific to McLaren Racing.

The squad had suffered financial losses in the preceding years (F1 was yet to embrace financial regulations) and was a comparative minnow in the sport having gone the better part of a decade without any success of note.

Crucially, financial regulations came into effect for 2021 with the most recent iteration of the Concorde Agreement.

While that was a revolutionary moment for the health of the broader industry, it was instrumental in preventing McLaren Racing from entering a negative spiral, as MSP Capital Partners agreed to acquire a slice of the organisation in December 2020.

With its future secured, McLaren clawed its way to the front of the F1 field while financial regulations and a more open approach with fans saw the sport soar in popularity – and value.

Having recovered from its financial fragility, McLaren won last year’s Constructors’ Championship, its first since 1999, and is on course to repeat that feat this year. It is also set to add a first drivers’ title since Lewis Hamilton’s maiden crown in 2008, with Oscar Piastri holding a 34 point advantage over teammate Lando Norris with nine races remaining.

The sale of MSP Capital Partner’s stake in a deal that values McLaren at $5billion highlights not only the transformation of the team and growth of the sport, but the institutional appetite for the industry.

And while MSP Capital Partners has cut its ties with F1 for now, it remains interested in becoming involved again, should the right opportunity present itself.

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