In the realm of entertainment and sports, a monumental business deal is in the works. Endeavor Group Holdings, Inc. (NYSE: EDR) has struck a landmark agreement with Silver Lake, a prominent venture capital firm. This deal, which places Endeavor’s shareholder value at $27.50 per share, values the company at a staggering $13 billion, fully immersing the company into a private equity structure.
Silver Lake, already a majority stakeholder controlling 71% of Endeavor’s voting stock, indicated in October that it was actively exploring new strategic alternatives for the company. Among these likely alternatives, taking Endeavor private had surfaced as the most viable and potentially lucrative option. The agreed value of $27.50 per share presents a generous premium to the market valuation of $17.72 per share on the day Silver Lake first announced its plans to seek new opportunities and alternatives. Notably, this takeover price also marginally surpasses Endeavor’s closing rate of $25.81 on the day of the agreement.
Under the conditions of this unique agreement, Silver Lake will obtain total ownership of Endeavor, acquiring 100% of the outstanding shares that they don’t already possess, save for certain rolled interests. Endeavor’s shareholders stand to receive $27.50 per share in cash. This figure represents a 55% premium to the unaffected share price of $17.72 per share as of the market close on October 25, 2023. This exciting development reveals a 39% premium to Endeavor’s unaffected 30‐day volume-weighted average price (VWAP), according to an official statement.
This historic transaction is set to become official by the end of the first quarter of 2025. Despite this significant shift in company structure, Endeavor’s crown jewel: the Ultimate Fighting Championship (UFC), will continue to function as a publicly traded organization. That entity will coexist with the World Wrestling Entertainment and a combined entity “TKO,” following Endeavor’s successful acquisition in 2023 for $9.3 billion. Interestingly, TKO Group Holdings will stay as a separate publicly-traded firm post the acquisition.
In light of these developments, Silver Lake also projected that the consolidation of TKO with Endeavor would yield a combined total enterprise value of a staggering $25 billion. If realized, this would notch up as the most significant private equity public-to-private investment transaction in over a decade, and the largest ever in the media and entertainment industry.
Year-to-date, Endeavor’s shares have experienced an 8.77% uplift, while TKO Group observed an 11% increase. From a sports wagering perspective, Endeavor has actively been involved via its IMG Arena unit, which came further into spotlight following its acquisition of OpenBet from Scientific Games in 2022. Silver Lake, on the other hand, has substantial investments in Fanatics, an emerging entity in the US online sports betting world, riding along with stakes in multiple sports leagues and teams.
With assets under management worth approximately $102 billion, Silver Lake’s portfolio companies have generated an impressive $258 billion in revenue, cementing its position as a dominant investor in the entertainment and sports sectors.
