Staple Street Capital Group LLC, the small buyout firm that owns Dominion Voting Systems, has scored a $US787.5 million ($A1.2 billion) windfall after Fox Corp settled a defamation lawsuit brought by the voting machine operator.
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The New York-based private equity firm stands to earn a return that dwarfs the $US38.3 million ($A56.9 million) it paid in 2018 to acquire a 76.2 per cent stake in Dominion.
The $US787.5 million ($A1.2 billion) Dominion will receive from Fox in the settlement - which also comes with an acknowledgement of a court ruling from its cable channel Fox News that it aired false claims about Dominion machines facilitating fraud in the 2020 US election - is about half the $US1.6 billion ($A2.4 billion) in damages it was seeking in its defamation lawsuit.
Excluding any taxes or fees paid to lawyers, the $US787.5 million ($A1.2 billion) is 20 times what Staple Street paid for the company.
Even before Tuesday's settlement, Staple Street's investment in Dominion had paid off handsomely.
Fox said in a court filing that Dominion was valued at about $US226 million ($A336 million) in the run-up to the 2020 election, citing exhibits it did not make public.
That was up from the $US80 million ($A119 million) valuation the acquisition of Dominion was clinched in 2018.
Staple Street, which according to its website has $US900 million ($A1.3 billion) in assets under management, and Dominion did not respond to questions on the profit that the private equity firm stands to earn.
Investors in the $US265 million ($A394 million) private equity fund that Staple Street was using for investments when it acquired Dominion include the University of Arizona's endowment, Travelers Insurance and fund-of-funds manager Hauser Private Equity, according to data provider Pitchbook.
The investors did not respond to requests for comment.
Founded in 2009 by Stephen Owens, a former Carlyle Group Inc dealmaker and Hootan Yaghoobzadeh, a Cerberus Capital Management veteran, Staples Street invests in companies in a range of sectors, including financial services, health care and chemicals.
Yaghoobzadeh told reporters on Tuesday that Staple Street backed Dominion in its mission to shoot down lies against it.
"We are proud to have played whatever part we could in helping Dominion achieve these important goals," he said.
Staple Street's previous investments include theme park operator Six Flags Entertainment Corp and information technology services provider Cyberlink ASP Technology Inc, according to its website.
In one of the court filings, Fox cited a December 2020 text from a former Staple Street employee to a current executive that proved prescient.
"Would be pretty unreal if you guys like 20x'ed your Dominion investment with these lawsuits," the text read.
Australian Associated Press
