UFC Parent Endeavor Going Private in $13B Deal with Silver Lake

Posted on: April 2, 2024, 04:29h. 

Last updated on: April 3, 2024, 10:23h.

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

Endeavor Group Holdings, Inc. (NYSE: EDR) is being taken private by venture capital firm Silver Lake in a transaction valuing the target at $27.50 a share, or an equity value of $13 billion.

PGA Tour Endeavor Fenway LIV Golf
Endeavor CEO Ari Emanuel. The company is going private in a deal with Silver Lake. (Image: Getty)

Silver Lake, which owns 71% of the voting stock in Endeavor, announced last October it was seeking alternatives for the entertainment and sports company, including taking it private. The $27.50 a share offer values the target at a substantial premium relative to the $17.72 per share price it closed at on the day Silver Lake unveiled plans to explore alternatives for the company. The takeover price is also above Endeavor’s closing handle of $25.81 on Tuesday.

Under the terms of the agreement, Silver Lake will acquire 100% of the outstanding shares it does not already own, other than rolled interests. Endeavor stockholders will receive $27.50 per share in cash, representing a 55% premium to the unaffected share price of $17.72 per share at market close on October 25, 2023, the last full trading day prior to Endeavor’s announcement of its review of strategic alternatives, and a 39% premium to Endeavor’s unaffected 30‐day volume-weighted average price (VWAP), “ according to a statement.

The deal is slated to close by the end of the first quarter of 2025.

UFC Will Remain Public Company

Silver Lake has been an investor in Endeavor since 2012 with the former supporting the latter’s 2016 acquisition of the Ultimate Fighting Championship (UFC).

UFC went on to become one of the jewels in the endeavor portfolio. Last year, Endeavor finished the acquisition of World Wrestling Entertainment for $9.3 billion. The buyer combined WWE with UFC and changed its stock ticker to “TKO.” TKO Group Holdings will remain a publicly traded entity when Endeavor is formally acquired by Silver Lake.

“Silver Lake believes that when consolidating all of TKO’s value into Endeavor, the combined total enterprise value of $25 billion will make this the largest private equity sponsor public-to-private investment transaction in over a decade, and the largest ever in the media and entertainment sector,” added the venture capital firm in the statement.

Shares of Endeavor are up 8.8% year-to-date while TKO Group is higher by 11%.

Endeavor, Silver Lake Have Some Betting Exposure

Endeavor has some exposure to the world of sports wagering. Its IMG Arena unit provides data to sportsbook operators. In 2022, 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.

For its part, Silver Lake is an investor in Fanatics, which is a rising player in the US online sports betting industry. The company also has stakes in several sports leagues and teams.

Silver Lake has $102 billion in assets under management and its portfolio companies generated $258 billion in revenue, according to its website.