UFC Owner Endeavor Group in Talks to Be Taken Private

Posted on: October 25, 2023, 09:15h. 

Last updated on: October 26, 2023, 12:34h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Shares of Endeavor Group Holdings, Inc. (NYSE: EDR) surged 22.57% in Wednesday’s after-hours trading session. That’s after venture capital firm Silver Lake said it’s exploring strategic alternatives with the parent company of the Ultimate Fighting Championship (UFC), including taking it private.

OpenBet acquisition
Endeavor Group CEO Ari Emanuel, seen above. Investor Silver Lake may look to take the company private. (Image: Vanity Fair)

Silver Lake owns 71% of the voting power in Endeavor, which also owns IMG Arena and operates the Professional Bull Riders (PBR) and Euroleague.

Silver Lake is committed to strategies that deliver value for all shareholders of Endeavor. To that end, Silver Lake is currently working toward making a proposal to take Endeavor private,” according to a statement issued by the Menlo Park, Calif.-based venture investor. “Silver Lake firmly believes in Endeavor’s business and is not interested in selling its shares in Endeavor to a third-party nor in entertaining bids for assets that are a part of Endeavor.”

Silver Lake’s comments on not seeking an outside buyer for its Endeavor stake are pertinent because Endeavor rival CAA recently sold a majority stake to French billionaire Francois-Henry Pinault.

Silver Lake News Extends Busy Stretch for Endeavor

News of Silver Lake’s talks with Endeavor extends a busy period for the latter.

The company recently finished the acquisition of World Wrestling Entertainment for $9.3 billion. The buyer combined WWE with UFC and changed its stock ticker to “TKO.” In May, Endeavor announced its first dividend,while also telling investors it will repurchase up to $300 million worth of its shares.

Endeavor owns 51% of that business and has made clear it’s not interested in selling that stake. It could be a source of allure for Silver Lake.

“Our Co-Chief Executive Officer, Egon Durban, and our Managing Director, Stephen Evans, serve as members of the Executive Committee of the Board of Directors of Endeavor. Silver Lake has been a committed investor since 2012 and has made significant investments in Endeavor since then to support its growth,” added the investor in the statement.

Endeavor’s Gaming Ties

Beyond UFC’s rising popularity with bettors, Endeavor has clear ties to the sports wagering space.

For example, its  IMG Arena unit provides data to sportsbook operators. Last year, Endeavor bolstered that business with the acquisition of the OpenBet sports wagering unit from the company then known as Scientific Games. OpenBet clients include DraftKings, FanDuel, William Hill, and WynnBet, among others.

Silver Lake isn’t a stranger to the gaming arena, either. In addition to its investment in Endeavor, the venture investor holds a stake in Fanatics, which recently joined the U.S. sports wagering fray. The company has $101 billion in combined assets under management in several sports leagues and teams.

“Silver Lake’s portfolio companies collectively generate nearly $265 billion of revenue annually and employ approximately 533,000 people globally,” noted the firm.