Italian Football Club Atalanta B.C. Pulls Off Novel Financing Deal

(Bloomberg) -- Carlyle Group's global credit unit is leading a private debt package for Italian football club Atalanta B.C., according to several people familiar with the matter, who spoke on condition of anonymity as the matter is private.

The debt will partly fund a stake in the club bought by a consortium of private equity investors in February, led by Bain Capital's co-chairman Stephen Pagliuca. The group acquired 55% of La Dea, the holding company of the Percassi family, which owns roughly 86% of Atalanta B.C.

Atalanta's deal is a rare example of a European football team turning to private credit funds for financing. Historically, heavy hitters in private credit have steered clear of the sector because of profitability issues. However, as private equity firms look to buy up chunks of the industry, direct lending funds are more actively eyeing up financing the buyouts.

Carlyle said it did not want to disclose the terms of the deal at this time. A Percassi spokesperson declined to comment. Atalanta and Bain Capital didn't respond to a request for comment.

The fresh debt is at the holding company level, and could be paid in cash or kind at the club's discretion, according to a person with direct knowledge of the matter. The debt provided to Atalanta is below its maximum capacity, as the lenders want to keep open the possibility of investing more in the future.

The club had an enterprise value of 364 million euros ($403 million) in 2021, according to a Football Benchmark report by accountancy firm KPMG. Total operating revenues for Atalanta's 2019/2020 year, when it reached the quarterfinals of the UEFA Champions League -- the continent's premier club competition -- amounted to 151.8 million euros.

Football clubs have raised public bonds and U.S. private placement bonds before, as well as securitizations. In Italy, top-tier teams like FC Internazionale SpA and AS Roma SpA have launched high-yield bonds, while some special situation funds such as Elliott Capital Management and Oaktree Capital Management have also provided rescue financings for AC Milan SPA and Inter Milan too.

In the U.K., Michael Dell's MSD Partners has also financed debt deals for mid-tier soccer clubs like Southampton and Burnley.