Don’t celebrate project’s huge investment until you read this
All is not “golden” regarding the news of Sachs $233 million investment into UA’s Port Covington
The Baltimore Sun reported that Goldman Sachs will invest $233 million toward UA’s Port Covington project, which would make the investment banking firm co-owners in the $5.5 billion development.
For me, that raises some very interesting questions on several fronts. This column will examine some of those questions.
First, just what do we know about Goldman Sachs? You may be surprised at the firm’s history in the investment business. With that said, let’s pull back the curtain on a key component of the UA deal.
I know UA is focusing on the dollars and cents, but does this deal make sense for UA? Do the math, folks: a $233 million portion of the $5.5 million price tag gives Goldman Sachs 1/2 ownership at a 1.2% investment, according to the Sun article.
How that equals fair is something inquiring minds may want to know.
There are some interesting quotes in the Sun article that should be noted:
Sagamore has secured $660 million in public financing for the project — the largest of its kind in city history — and has begun work to transform the once-industrial peninsula. The developers had said they were working to attract an equity investor to accelerate plans.
With that in mind, let’s take a look at UA’s financial outlook, which may give bigger investors some pause:
The next day, Standard & Poor’s downgraded Under Armour’s credit rating to junk. Ouch.