Clearlake Capital’s Chelsea consortium, which is spearheaded by American tycoon Todd Boehly, is expected shortly to complete the biggest sporting takeover in history.
Chelsea announced in the early hours of Saturday morning it would be submitting the £4.25bn proposed deal to the UK government and Premier League for approval, with reports claiming the deal could be finalised before the month-end.
Clearlake Capital, the California-based private equity investment firm that manages over US$72bn in assets, will own a 60% majority stake and half of the West-London side’s shares.
The company that took in US$25bn in new assets over the last year was working to purchase debt manager CBAM in early-2022 but thought the US$787mln asking price was too high.
Its two co-founders José Feliciano and Behdad Eghbali grew close with Boehly, the Eldridge Industries founder, which owns CBAM. This is where the foundations of its potential Chelsea takeover formed.
Boehly led the group, which includes Swiss billionaire Hansjörg Wyss, Guggenheim Partners chief executive Mark Walter and Daniel Finkelstein, a UK Conservative party peer and Times newspaper columnist.
But who are the tycoons and companies behind the takeover?
Clearlake Capital
Founded in 2006, it’s one of the largest buyers of mid-sized companies and targets highly profitable businesses in the consumer goods, industrial and technology sectors, which it grows via leveraged or debt-financed acquisitions.
See the company’s whole portfolio here.
Its flagship funds, including a new US$14bn buyout fund, earned net returns of between 34% and 56% between 2013 and 2018, according to public pension fund disclosures.
“Clearlake has continued to be one of the best performers in our private markets’ portfolios,” said Shawn Wooden, treasurer of the State of Connecticut, which invested over US$500mln with the group.
Its most successful deal was the sale of healthcare software company Provation, which it acquired for US$180mln in 2018. It made four acquisitions before offloading to Fortive for US$1.43bn in December. The group made 20-times its money, as it financed the purchase using debt.
Clearlake has become Wall Street’s largest user of ‘GP-led secondaries.’ It involves locating a private equity company that’ll buy a substantial portion of an existing investment.
Investors are then given the choice to sell at its new valuation or roll their stake into a new fund that will hold the investment for roughly four more years.
Despite having led or co-led over 300 investments, this would be the group’s first venture into the sporting world.
The founders Feliciano and Eghbali, who own a combined 80% of Clearlake, intend to buy the football club from the group’s private equity funds.
Todd Boehly and Eldridge Industries
Boehly, who has been the main public figure in the Chelsea proposed deal, became wealthy through real estate and is now the chief executive and chairman of Eldridge Industries – an American private investment firm.
Eldridge owns or invests in approximately 100 companies, including Security Benefit Life Insurance, an insurer that it owns with US$40bn in assets.
The 46-year-old American tycoon, who has a net worth of US$4.5bn, was reportedly keen on buying Chelsea in 2019 but his then £3bn offer was not sufficient for Abramovich.
Boehly spearheaded the purchase of Major League Basketball franchise Los Angeles (LA) Dodgers in 2012 for US$2.1bn. He owns 20% of the club and is part of the ownership consortium Guggenheim Baseball Management.
In the last decade, the Dodgers have been one of the highest-spending baseball teams and had the highest payroll of all teams in 2022 at US$289mln.
He also has a minority stake in the NBA basketball team LA Lakers, with his ownership group alongside Mark Walters, who have a combined 27% stake.
Mark Walter and Guggenheim Partners
Walter is the chief executive of Guggenheim Partners, a private global financial services firm that has more than US$310bn (£250bn) in assets under management.
His net worth was US$3.9bn in May 2022, according to Forbes.
Walter, too, is a co-owner of the LA Dodgers and has a minority stake in LA Lakers. A decade ago he was the eighth most influential person in sports business, according to the Sports Business Journal.
He is personally invested in plant-based food producer Beyond Meat and online car vendor Carvana.
Hansjörg Wyss
The 86-year-old Swiss billionaire, with a US$5bn net worth in May according to Forbes, made his fortune through Synthes, a manufacturer of medical devices, which he sold to Johnson & Johnson (NYSE:JNJ) for US$20.2bn.
He also worked in government infrastructure services, the steel industry, and sold aircraft, while Wyss holds stakes in biotech companies Novocure (NASDAQ:NVCR) and Molecular Partners.
Forbes claimed he is "among the most philanthropic people in the world," signing The Giving Pledge in 2013 and agreeing to give away most of his fortune.
He has made major donations to environmental and scientific causes, with the assets of his charitable foundations reaching almost $2bn (£1.6bn).
Jonathan Goldstein and Daniel Finkelstein
The consortium also includes British businessman Jonathan Goldstein and British journalist Daniel Finkelstein.
Goldstein is the co-founder and chief executive of the multinational investment firm Cain International.
Finkelstein was made a member of the House of Lords in August 2013 for the Conservative Party, as well as being a former chairman of Policy Exchange.
He was also the old executive editor of The Times and remains a weekly political columnist.