Kohlberg Kravis Roberts & Company, a private equity giant with its hands in a range of businesses, from natural gas to maritime finance, has bought into a new sector: German soccer.
K.K.R. has agreed to buy a 9.7 percent stake in Hertha BSC, a soccer club in Berlin, according to an announcement on Friday. The deal, worth 61.2 million euros ($82.6 million), will allow a club that had experienced years of financial challenges to reduce its debt and buy back licensing and catering rights.
The deal ties K.K.R. to a soccer team with a loyal following in Germany, and one that had long been in search of a major investor. Last year, Hertha BSC sold rights to catering in its stadium, part of an effort to shore up its finances.
Though outside investors are not unusual in German soccer â€" Audi and Adidas own stakes in another club, Bayern Munich â€" it is virtually unheard of for an American private equity firm to buy a stake. The German association that regulates the industry forbids any investor from owning a majority of a club’s shares.
K.K.R., which is getting a seat on Hertha BSC’s supervisory board, has the option to increase its stake to 33.3 percent over time. Still, the private equity firm will not be allowed to influence matters related to the sport, like finding new players.
The deal “represents a quantum leap for the economic situation of our club,†Michael Preetz, managing director of Hertha BSC, said in a statement. “We will remain fully committed to our strategy of focusing on our superior youth development and of integrating young, talented players.â€
Hertha BSC has had a mixed record over the years, and the last time it won the German championship was in 1931. Still, it is currently ranked seventh out of 18 in the Bundesliga, Germany’s premier league. With more than 30,000 members, it is Berlin’s biggest club.
The deal is K.K.R.’s latest in Germany. In recent years, the firm has invested in Wild Flavors, a maker of ingredients for food and beverages, and struck a deal to restructure the debt of the auto repair chain Auto-Teile-Unger.
It also formed a music rights joint venture with Bertelsmann, which the media giant bought full control of last year.
In the soccer deal, executives of Hertha BSC sought to emphasize that working with private equity would not change how the club operates. But they extolled the deal’s financial benefits.
Ingo Schiller, the club’s chief financial officer, said: “Today is the best day I have had since taking on a managerial role.â€
