Endeavor Sets IPO Pricing, Also Eyes $1.8B Placement And Full UFC Ownership

Dade Hayes and Jill Goldsmith
·3 min read

Endeavor has set the pricing and details of its initial public offering and a private placement, aiming to bring in $1.35 billion and gain full control of the UFC mixed-martial arts circuit.

The timing of the offering is not firmly set but today’s SEC filing of updated details sends a signal that Endeavor management is about to embark on a road show to pitch investors. The parent company of WME, IMG and a range of content assets yanked its previous IPO at the 11th hour in 2019. Market conditions and other factors would have stymied its chances, the company concluded. The IPO market overall has rebounded strongly in the meantime, and Endeavor also resolved a protracted struggle with the Writers Guild of America over packaging.

In the filing, Endeavor said it plans to offer 21.3 million shares, priced at $23 to $24 a share. Including a number of restricted shares earmarked for management, the offering is expected to be valued in the range of $500 million. Shares of Endeavor Group Holdings will trade on the New York Stock Exchange under the ticker symbol EDR.

Separately, the company plans a private placement that will yield $835.7 million for Endeavor to take full control of UFC. An additional $951.5 million would be designated as working capital.

Endeavor led a group of private investors in a $4 billion acquisition of the UFC in 2016. While the circuit has grown steadily, especially among younger fans, and netted lucrative TV and pay-per-view deals, the transaction added to Endeavor’s debt load.

The filing put the company’s debt at $5.92 billion on a pro forma basis (as of Dec. 2020 assuming the IPO and concurrent private placement at high end of $24 a share and buyout of UFC were completed). Cash and cash equivalents were $1.96 billion.

When all the transactions are wrapped up, Silver Lake and Emanuel and Whitesell and entities controlled by them will control 89% of the combined voting power of our outstanding common stock.

The private placement has been agreed upon, but its closing is contingent upon the IPO occurring as planned.

Along with the rest of the details in the 244-page filing, Endeavor also mentioned that it has made two more acquisitions. The company bought college athlete preparatory business Reigning Champs for $200 million. It also paid $35 million for FlightScope, a data, production and tracking tech firm focused on golf and tennis events.

Last month, Endeavor formally resumed its IPO quest, filing the initial paperwork but providing few financial details. It disclosed it had added Elon Musk to the board of directors.

The Ari Emanuel-led firm acknowledged suffering a heavy blow in 2020 due to the coronavirus pandemic, posting a net loss of $625.3 million. “As challenging a year as 2020 was, it underscored the strength, creativity, and resilience of our people who mobilized time and time again in the face of overwhelming odds,” Emanuel wrote in a letter included in the filing. “We made difficult decisions but worked as a team to find creative solutions and best position the business for the future.”

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