Endeavor to be taken private by Silver Lake in $13bn transaction

Endeavor has entered into a definitive agreement with Silver Laker to move back into private ownership after three years as a publicly traded company.

The OpenBet and IMG parent company has agreed to an all-cash deal with the private equity firm, which values Endeavor at an equity value of $13bn (£10.3bn).

Under the terms of the agreement, Silver Lake will acquire all of Endeavor’s outstanding shares that it doesn’t already own, other than rolled interests. 

Endeavor’s stockholders will receive $27.50 per share in cash, which represents a 55% premium to the unaffected share price of $17.72 per share at market close on 25 October 2023.

That date coincides with the last full trading day prior to Endeavor’s announcement of its strategic review, and a 39% premium to the company’s unaffected 30-day volume-weighted average price. 

The equity value of Endeavor on 25 October 2023 stood at $8.2bn, with the premium set to be paid by Silver Lake, representing $4.6bn more in equity value to shareholders.

However, Endeavor’s TKO Group Holdings entity, the arm formed last year following the merger of the UFC and WWE, is not party to the transaction.

TKO will remain a publicly traded company, with Endeavor noting the division would “continue to benefit from its connectivity to Endeavor’s expertise, relationships and significant capabilities”.

Silver Lake noted that when consolidating all of TKO’s value into Endeavor, the combined total enterprise value of $25bn would make the move the “largest private equity sponsor public-to-private investment transaction in over a decade”.

The firm added that it would likely be the largest ever public-to-private move in the history of the media and entertainment sector.

The transaction is not subject to any financing conditions, with the move funded via a combination of new and reinvested equity from Silver Lake.

Additional capital has also been stumped up by Mubadala Investment Company, DFO Management, Lexington Partners and funds managed by Goldman Sachs.

Equity rolled over from Endeavor’s senior management team and new debt financing from a host of banks, including Barclays, Bank of America and JP Morgan, have also been confirmed.

The deal has been “reviewed, negotiated, unanimously approved and recommended” by Endeavor’s special committee.

The transaction is expected to close by the end of the first quarter of 2025, with no other stockholder approval required.

BDT & MSD Partners acted as Silver Lake’s lead financial advisor, alongside several financial institutions including JP Morgan, Barclays and Goldman Sachs as lead financing arrangers.

Latham & Watkins acted as legal advisors to Endeavor. 

The move from Silver Lake to take Endeavor private comes after a lengthy relationship between the two.

Silver Lake initially invested in Endeavor in 2012 and supported the company’s acquisition of the Ultimate Fighting Championship (UFC) in 2016.

Silver Lake noted that Endeavor has grown revenue from around $350m per year back in 2012 to almost $6bn, at the time of writing.

Endeavor’s senior team, including CEO Ariel Emanuel, chair Patrick Whitesell and COO and president Mark Shapiro are set to be retained following the transaction.

Emanuel said: “Since 2012, Endeavor’s strategic partnership with Silver Lake and Egon Durban have been central to our evolution into the global sports and entertainment leader we are today.

“We believe this transaction will maximise value for all of Endeavor’s public stockholders and we are excited to continue to unlock and invest in the growth opportunities ahead as a private company.”

Egon Durban, Silver Lake managing partner and co-CEO, said: “Our unwavering belief in Ari [Ariel] and Patrick, together with Mark and other talented leaders at Endeavor, has never been stronger. This is a very special partnership. 

“Now, Endeavor can take advantage of its unique core platform to meet the dynamic forces driving growth in content, sports and live events with bold vision.

“Consistent with our mission and underscored by this commitment being among the largest in Silver Lake’s history, we are all in on working with the Endeavor team and our trusted anchor investors to create value by accelerating growth at scale.”

Endeavor acquired OpenBet from Light & Wonder in September 2022 for approximately $800m, paid through a combination of cash and shares of Endeavor’s class A common stock. 

Recently, Endeavor merged OpenBet and IMG Arena into one entity that will continue to operate under the OpenBet brand. 

Under the OpenBet banner, IMG Arena will continue to offer sports data, integrity and fan engagement products to operators and rightsholders. 

The combined business arm will be led by OpenBet CEO Jordan Levin, who will report to Shapiro.