McLaren confirms GBP 550m fundraising led by Saudi Arabia, Ares

The private equity and credit groups of Ares and PIF have committed to invest a total of GBP 400m in McLaren Group in the form of preference shares and equity warrants.

Existing shareholders, including Mumtalakat, alongside a limited number of new private investors, will invest a total of GBP 150m in McLaren in the form of convertible preference shares. This will notably allow for the repayment of the loan received in June 2020 from the National Bank of Bahrain. Mumtalakat will remain the largest shareholder in McLaren.

Completion of the capital-raising transactions remains subject to closing conditions, including the raising of new senior secured financing, which McLaren intends to use to refinance its existing senior secured notes. McLaren launched a USD 620m offering on 19 July.

McLaren said the transaction would fuel growth and offer "significant" deleveraging opportunity for the business.

Company
Founded in 1963, McLaren is a British luxury automotive, motorsport and technology company.

The group is formed of three companies: technology and data business McLaren Applied; McLaren Automotive, which builds lightweight supercars; and a majority stake in McLaren Racing, which competes in the Formula 1 World Championship and IndyCar in the US.

The McLaren group has more than 3,000 employees and is headquartered in Woking, England. In its 2020 results, the group said it was notably affected by the Covid-19 crisis: turnover in 2020 reached GBP 771m, with a negative EBITDA of GBP 49m. In the year prior, these figures stood at GBP 1.48bn and GBP 181.9m, respectively.

People
Ares Management – Scott Graves (partner).

Advisers
Company – Goldman Sachs International (M&A); HSBC (M&A); Global Leisure Partners (M&A); Ashurst (legal).
Equity – Kirkland & Ellis (legal); Allen & Overy (legal).

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