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I have always been a Chris Evans fan. I loved TFI Friday and pretty well everything else he’s done aswell. It’s funny to think of him on Radio 2 and just about to take over from Terry Wogan though!

Whilst being interviewed on the Jonathan Ross show last night he talked about the time when he borrowed £85 Million to buy Virgin Radio. Probably this deal will be explained in greater detail in his new book.

What caught my attention was the fact that when he was holed up in a room in London, within a taxi ride of all the potential lenders, dressed in a black suit and black polar neck, he had to come up with a business plan and an exit route or strategy for the banks and investors. In essence I guess it was that he would buy Virgin Radio for £85 Million and in 5 years time it would be worth somewhere between £150 Million and £300 Million and he would sell out ( trade sale ) then.

To close the deal the banks asked how much he had – apparently about £2 Million at the time – and that had to go into the pot as the “ junior debt “ to get the £ 85 Million he needed. So, here is a classic case of “ leverage “ using bank funding. £2 Million of Chris’s own money attracted the other £83 Million of bank and other investors money. Within 18 months or so Virgin Radio was bought by SMG for around £220 Million – ahead of plan for the exit and within the range that he predicted – in fact about mid-way between £150 Million and £300 Million. So, he and the banks and investors got their money back – and some !!

Somebody had obviously worked with Chris on the business plan and the financials to back up the strategy which was basically that Chris would take a radio station, add some of that old Chris Evans magic ( Chris had already massively increased listening ratings ), make it worth much more money and then sell it. All within a 5 year timeframe.

Of course whoever bought it probably expected that Chris would stick around for a while. No doubt there was some sort of earn-out and lock-in period. As we know, and Chris admits, he then went
“ off the rails “ a bit and left the purchasers holding the baby.

He then got into a bit of a legal spat with Virgin and SMG and ended up worst off. I think this was also when he started buying Billie Piper Ferrari’s and holed up in Spain !!!



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