Petty Enterprises Partners With Boston Ventures; Bobby Labonte Signs 4-Year Contract

[DebWilliams-GFN]

By Deb Williams

CONCORD, N.C. (June 11, 2008) – Legendary Petty Enterprises, stock car racing's most successful organization, announced Wednesday it has partnered with Boston Ventures, a leading middle market private equity firm that invests in the entertainment, media, and communication sectors.

The business venture marks the first time since Lee Petty formed the organization in 1949 that an outside firm has invested in the internationally famous race team.

In addition to the new partnership and management team, Petty Enterprises also announced that 2000 NASCAR Cup champion Bobby Labonte had signed a four-year contract extension, and the operations of Petty Enterprises and the Richard Petty Driving Experience will be integrated. The two have been operating as separate entities with Richard Petty the only common denominator.

“Everything has changed so much since we first started,” Petty said during the press conference at Lowe's Motor Speedway. “As time progressed, it really got away from us from a family standpoint. We have so many other investors coming in, making NASCAR grow from the outside in. All the years that we did it, Junior Johnson, the Wood Brothers, Bud Moore, we did it from the inside out, and over a period of time, it got to looking pretty good, so you had people from the outside coming in. We just got behind, because we still tried to do it from the automotive deal, from the inside out.”

Kyle Petty called the partnership a “huge step forward” for the family operation.

“Every element of today's press conference is not only about who we are as Petty Enterprises, but where we want to be as Petty Enterprises,” the third-generation driver said. “We talked to numerous, numerous people and Boston Ventures' philosophy, where they were, where they wanted to be, what they wanted to do, not only in this sport, but globally, was important to us at Petty Enterprises.”

Under the new management structure, the 70-year-old Petty will be chairman emeritus of Petty Enterprises, but will be involved in the business on a day-to-day basis. Kyle Petty, who has been the company's acting CEO, will step aside and David Zucker will become the new CEO. Barry Baker, managing director of Boston Ventures, will become chairman of Petty Enterprises.

Petty Enterprises also has a newly-formed board of directors. Andrew Davis, managing director of Boston Ventures, will serve on the Petty Enterprises board of directors.

“Richard and the Pettys stand for so many of the things that are often missing in today's 'What can you do for me?' multi-million dollar sports culture – integrity, dedication, hard work, charity and family. I admire that and I know the Boston Ventures guys do as well,” Zucker said.

Both parties declined comment on the percentage owned by each, saying only it was a partnership. However, Labonte admitted the partnership played a key role in his decision to remain with Petty Enterprises.

“This deal (has been in the works since last fall, but it) needed to come down at a certain time,” Labonte said. “It couldn't come down in November of this year, because that's too late. We have to make those decisions earlier. So with Boston Ventures coming on board, it definitely was the thing that swayed me in the way to stay. They're bringing the things we need as a race team to move forward. So it weighed a lot (in my decision).”

Labonte also said there were options for him to remain involved with the team when he decides to retire from his driving career.

Boston Ventures has invested $2.5 billion in more than 70 companies, and its capital investment in Petty Enterprises will allow the company to grow significantly in personnel, equipment, technology, testing and branding.

“Among our goals will be improving race team operations and performance one week at a time,” Zucker said, “and adding teams over the coming years.”

Kyle Petty said he would continue to drive a race car, but his father stopped short of saying if it would be on a full-time basis. Richard Petty said he would like to see the operation have two full-time cars next year, and one that raced part time. He doesn't foresee Petty Enterprises fielding three full-time cars until after the 2009 season.

“We are not that arrogant to think this is going to happen overnight,”
Davis said.

“We totally recognize there is fierce competition out there with Hendrick, Roush-Fenway, Gillette Evernham, (Richard) Childress, Joe Gibbs and Penske. But it is our goal to bring back Petty Enterprises to its former glory.

“It's going to take some time to build the value that we think can be created here, so in our minds it's not going to be a quick flip. Our typical investment period is around five years, this one may be a little bit longer. It's not going to happen overnight. We have the patience and the capital to make sure we can go for the long run.”

Petty said his family discussed the operation's future and decided if it was going to play the game, it needed to get into the game and the only way to do that was to obtain new money for Petty Enterprises.

“We've been talking about this stuff for two or three years,” the elder Petty said. “You can't believe how many different situations we've been in to try to get to where we are now. Most people we talked to wanted to come in and buy the team or run the thing, so that's where Boston Ventures came in. They said, 'You all run the show. We're going to put some money in here and help you take care of the money, but grow the business. We really liked that approach.

“From the outside, you're not going to see any difference except, hopefully, the team gets better. Inside, the way the Driving Experience is run, the way they've been doing, the way our people have been doing at Petty Enterprises, all that stuff is pretty well going to stay the same. I look at them [Boston Ventures] as joining our family.”

Robbie Loomis, Petty Enterprises' vice president of race operations, said the capital investment by Boston Ventures gives Petty Enterprises a new starting point.

“It doesn't change where we're at and it's not going to change anything when we go to Michigan this weekend,” Loomis said. “That's the hard part about it. But the nice part (is our new management team) understands how difficult it is. They understand how much money the Hendrick organization has, how strong their people are. They understand the Roush Fenway. They truly understand how tough this sport is.”