OMERS Deal Values Maple Leaf Sports & Entertainment at $8B

The Ontario Municipal Employees Retirement System has acquired a 5% indirect stake in Maple Leaf Sports & Entertainment Ltd. for C$546.8 million ($400 million) through a 20% direct stake in Kilmer Sports, owned by MLSE Chair Larry Tanenbaum.

The deal values the sports and commercial real estate company, which owns several Canadian sports franchises, at $8 billion, nearly five times the 2012 valuation from when the Ontario Teachers’ Pension Plan sold its 79.53% stake in MLSE for C$1.32 billion, approximately $1.29 billion at the time.

The company owns the National Hockey League’s Toronto Maple Leafs, the Toronto Raptors of the National Basketball Association, Major League Soccer’s Toronto FC and the Toronto Argonauts of the Canadian Football League, as well as some other minor league professional franchises. MLSE also owns Scotiabank Arena in Toronto and manages several other sports facilities. Kilmer Sports, owned by Tanenbaum, currently owns a 25% stake in MLSE.

According to OMERS, its role will be strictly as a financial investor, and it will not participate in the operational decisions of MLSE or any of its teams.

“This is an exciting and unique opportunity for OMERS members in Ontario communities to be connected to these iconic sports teams in their own backyard,” OMERS President and CEO Blake Hutcheson said in a release. “As an investor on their behalf, we actively seek out investment opportunities of the highest quality, that are fortified by trusted partnerships and that offer the potential of significant long-term upside. This one happens to be here in Canada and Ontario, which is also really important, and meaningful to OMERS.”

When the deal closes, Tanenbaum will retain an 80% stake in Kilmer Sports, which will in turn maintain its 25% stake in MLSE. He will also stay on as chair of MLSE, the NBA’s chairman of the board, and governor and member of the executive committees of both the National Hockey League and Major League Soccer.

“As an owner of MLSE, I’ve always seen myself as a steward of a public trust, working in service to the fans and the public to build Canada’s most iconic sports teams and win championships,” Tanenbaum said in a release. “Now with this investment by OMERS, I’m thrilled to be sharing this public trust with over 600,000 hard-working Ontarians.”