By Shasha Dai, Dow Jones LBO Wire
4/13/2005 - It's harvest season for Falconhead Capital.
Just days after selling its stake in Maritime Telecommunications Inc. - and realizing a five times cash-on-cash return - Falconhead has sold its 30% interest in the European ESPN Classic Sport network to Walt Disney Co.'s ESPN division, which owned the remaining 70%.
The parties have agreed not to disclose the enterprise value or other financials of the transaction. Launched in 2001, the network beams sports programs to 40 European countries, including France and Italy.
Falconhead, New York, has of late been busy realizing investments from its first - and, to date, only - fund, raised in 1999.
With the ESPN transaction, Falconhead has realized five of seven investments from the $214 million Sports Capital Partners LP, said Falconhead chairman and chief executive David Moross.
The realizations have generated "very good" returns, Moross said, declining to elaborate. In the firm's first exit, Falconhead sold online retailer The Golf Warehouse to publicly traded The Sportsman's Guide last June for $30 million, generating a return of between four and five times its $6 million equity investment. The firm's Web site also lists Tickets.com, which recently agreed to a buyout by a company associated with Major League Baseball, as an investment. The name of the fifth company that's been exited couldn't be determined.
The two investments from the fund that Falconhead is still managing are Premier Salons, an operator of upscale spas and salons, and National Powersport Auctions, an auctioneer of recovered and salvaged motorcycles. The firm is also planning one more investment; it is currently doing due diligence on a company and could close a deal in the next few weeks, Moross said.
LBO Wire has reported that Falconhead could soon raise a new partnership, but Moross was tight-lipped on fund-raising plans.
Limited partners in the firm's debut fund include California Public Employees' Retirement System and BNP Paribas, according to LBO Wire. Despite the name of the fund, the firm has shifted over the years away from sports and focused on what it calls "leisure-, lifestyle- and media-related businesses," Moross said.
- With reporting by Dwight Oestricher
Reach Falconhead at 212-634-3304.