Williams F1 team-owner plots engineering stake sale

The owner of the Williams Formula One (F1) team is exploring the sale of a stake in its engineering arm in a deal that could raise tens of millions of pounds for the famous racing outfit.

Sky News has learnt that Williams Grand Prix Holdings, which is listed on the Frankfurt Stock Exchange, has been approached by several parties about a deal involving Williams Advanced Engineering (WAE).

A transaction would mark another significant milestone for the British-based company, which was founded by Sir Frank Williams and Sir Patrick Head in 1977.

Its eponymous F1 team enjoyed enormous on-track success in the 1980s and 1990s led by drivers including Nigel Mansell and Damon Hill, but it has struggled to compete in racing terms for well over a decade.

Going into the Belgian Grand Prix this weekend at Spa-Francorchamps, Williams sits last in the F1 constructors’ championship, with only a solitary point to its name.

Sir Frank, whose daughter Claire has been its F1 deputy team principal since 2013, continues to hold a big stake in the company

Sources said that Williams was open to the sale of a majority stake in WAE although a more likely outcome would see a large minority stake acquired by a third party.

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A number of private equity firms have already expressed an interest in the business.

Another alternative would involve the F1 team-owner taking on debt finance to accelerate the growth of the WAE business.

Williams’ Advanced Engineering division was established in 2011 to commercialise the technology and expertise developed by its F1 team.

It works with corporate clients including Tesco and Unilever, while it has also signed a joint venture agreement with Unipart to produce performance batteries for automotive applications.

In the automotive sector, WAE’s customers include Aston Martin and Lotus.

Last year, the business received a Queen’s Award for Enterprise Innovation.

WAE recorded revenues of £44.8m in its 2018 financial year, up from £39.5m the year before, while earnings before interest, tax, depreciation and amortisation rose more modestly during the same period to £5.1m.

Lazard, the investment bank, acts as Williams’ long-standing corporate finance adviser although it has not yet been instructed to run a formal process on WAE.

The wider Williams Group is chaired by Nick Rose, a heavyweight boardroom veteran who also serves as a non-executive director of BAE Systems and BT Group.

It is due to publish half-year results in ten days’ time, at which point it could choose to set out more details of its decision to explore the disposal of a stake in WAE.

At Friday’s closing price, Williams Grand Prix Holdings had a market valuation of €134.5m (£m).

The F1 team has a title sponsorship deal with ROKiT, a telecommunications company, but commercial revenues on the racing side of its business have bee affected by its poor performance on the track.

The company said in its most recent annual report that it expects more clarity in the near future about how F1’s owner, Liberty Media, intends to reform the sport from a financial and technical perspective after 2021.

Williams declined to comment this weekend.

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