Endeavor, the sports and entertainment company led by Hollywood super agent Ari Emanuel, announced plans on Tuesday to go private, nearly three years after entering the stock market.
The deal, led by investment firm Silver Lake, Endeavor's longtime financial backer, is intended to usher in a new era for Endeavor, whose ambitious growth story has failed to garner traction on Wall Street. ing.
Under the terms of the transaction, Silver Lake will purchase any Endeavor shares it does not already own for $27.50 in cash. This price is 55% higher than the price at which Endeavor stock traded on October 25, the day before Endeavor announced it was exploring trading options.
The transaction values Endeavor at approximately $8.2 billion. The company is valued at $13 billion, including debt, making it the largest acquisition by a private equity firm this year.
For more than a decade, Mr. Emanuel and his business partner Patrick Whitesell have transformed what started as a talent agency with clients such as Dwayne Johnson and Ben Affleck into a new kind of media powerhouse: We have endeavored to change the organization to one that does not include such elements. We gather only the top talents in sports, entertainment, and fashion, and our content business shines a spotlight on them. It was a different vision from rivals like Creative Artists Agency, which also embraced outside investors but stuck primarily to the traditional agency business.
The company was led by Mr. Emanuel, who was caricatured by Jeremy Piven as an ultra-aggressive shouter on HBO's “Entourage,” and Egon, the brainy dealmaker behind Silver Lake's biggest deals.・Mr. Durban was an unexpected combination.
Silver Lake invested in Endeavor in 2012, and Mr. Durban assumed the role of chief advisor. A series of acquisitions followed, including IMG, an agency specializing in sports and fashion. Professional bull rider. New York Fashion Week. Technology for sports betting.
Most notably, Endeavor bought Ultimate Fighting Championship for $4 billion in 2016, betting on mixed martial arts' ability to attract live entertainment dollars. Last year, Endeavor acquired World Wrestling Entertainment and merged it with the UFC in a publicly traded company called TKO Group, hoping to make even more money from selling rights to live fights.
But some bets didn't pay off.
Endeavor once hoped to profit from “packaging,” the creation and sale of content that partners writers with other customers, but a dispute with the writers' union forced it to sell a majority stake in its in-house studio. I had no choice but to do it.
And while Endeavor believed TKO Group would be a strong draw for Wall Street investors, the company's stock price remains below its opening price. (The company will remain listed.)
Endeavor executives also said that selling a majority stake in Creative Artists Agency to French luxury tycoon François-Henri Pinault at a hefty $7 billion valuation would boost their company's valuation. I expected. However, Endeavor's stock price fell after the deal was announced.
The hope now is that delisting will allow Endeavor to continue making ambitious investments without attracting suspicion from public market shareholders. Silver Lake's support will continue, effectively doubling the size of Emanuel, Whitesell and their team.
“This is a very special partnership,” Silver Lake's Durban, who is also Endeavor's chairman, said in a statement. “We are committed to working with the Endeavor team and our trusted anchor investors to create value by accelerating growth at scale.”
Silver Lake is currently deeply committed to Endeavor's success and already controls approximately 70 percent of Endeavor's voting rights, and said it has no intention of selling its stake in the company. Nevertheless, the deal was negotiated on behalf of other shareholders with a special committee of Endeavor's independent directors.
Silver Lake knows how to take large companies private, restructure them, and bring them back public. This helped technology mogul Michael S. Dell buy out other shareholders in the company that bears his name and bring it back onto the stock market.
Mr Dell's family office, DFO Management, is helping to finance the deal, along with Abu Dhabi sovereign wealth fund Mubadala. investment firm Lexington Partners; Goldman Sachs' asset management division.