Silver Lake to take Endeavor Group private in $13b buyout
Technology investment firm will shell out $13 billion to acquire global sports and entertainment company Endeavor Group Holdings (NYSE: EDR) in what is believed to be the biggest private equity-sponsored buyout in over a decade and the largest ever in the sector.
The deal comes three years after Endeavor went public.
Endeavor is the majority owner of TKO Group Holdings, a premium sports and entertainment entity comprising US promotion companies Ultimate Fighting Championship (UFC) and World Wrestling Entertainment (WWE).
Endeavor and Silver Lake have a long-standing partnership, marked by more than $3.5 billion of direct investment across six distinct transactions over 12 years.
Silver Lake is Endeavor’s biggest shareholder, with around 31% equity at end December.
Terms of the buyout
Under the terms of the buyout, Silver Lake will acquire the balance of Endeavor shares it does not already own (other than rolled interests) for $27.50 each in cash.
The offer represents a 55% premium to Endeavor’s unaffected share price of $17.72 at market close on 25 October (which was the last full trading day before Endeavor announced a review of its strategic alternatives) and a 39% premium to the unaffected 30‐day volume weighted average price.
It is reported to be substantially higher than the median premium (low-to-mid 30% range) paid in private equity sponsored buyouts larger than $10 billion over the last five years in the technology, media, entertainment and telecommunications sectors.
When consolidating all of TKO’s value into Endeavor, the combined total enterprise value of $25 billion is expected to make Silver Lake’s acquisition the sector’s biggest private equity-sponsored public-to-private investment transaction in more than 10 years.
On the unaffected date, the equity value was $8.2 billion and the premium to be paid by Silver Lake represented $4.6 billion more value to Endeavor shareholders.
Financing arrangements
The Endeavor purchase will be financed through a combination of Silver Lake’s new and reinvested equity and additional capital anchored by Mubadala Investment Company, DFO Management and Lexington Partners as well as funds managed by Goldman Sachs Asset Management.
Equity will be rolled over by members of Endeavor management team and new debt financing committed by Goldman Sachs, JP Morgan, Morgan Stanley Senior Funding, Bank of America, Barclays, Deutsche Bank and Royal Bank of Canada.
Silver Lake has appointed US merchant banks BDT & MSD Partners and Raine Group as financial advisors to the transaction and KKR Capital Markets as global financing advisor.
Lead financing arranger and financial advisors will be Goldman Sachs, JP Morgan, Morgan Stanley, BofA Securities, Barclays, Deutsche Bank Securities and RBC Capital.
Legal advisors for Silver Lake are Simpson Thacher & Bartlett and Kirkland & Ellis, while Endeavor has retained Latham & Watkins.
Centerview Partners has been appointed as independent financial advisor to a special committee of Endeavor directors formed to review and consider the proposal and Cravath, Swaine & Moore is independent legal advisor to the same committee.
Multiple investments
Silver Lake has made multiple investments into Endeavor starting in 2012 and continuing through to Endeavor’s acquisition of sports education insitution IMG Academy in 2014 and its $511 million listing on the New York Stock Exchange in 2021.
This marked Endeavor’s second attempt to go public, following a failed effort two years prior.
Silver Lake also supported Endeavor’s acquisition of UFC in 2016 and the merger of UFC and WWE to create TKO in 2023.
TKO is not involved in Silver Lake’s acquisition of Endeavor and will remain a publicly traded company.
Strategic sense
Endeavor chief executive officer Ariel Emanuel said Silver Lake’s proposal made strategic sense.
“Since 2012, our partnership with Silver Lake has been central to our evolution into the global sports and entertainment leader we are today,” he said.
“We believe this transaction will maximise value for all of Endeavor’s public stockholders and are excited to continue to unlock and invest in the growth opportunities ahead as a private company.”
Silver Lake managing partner and Endeavor chairman Egon Durban said the companies would be a good fit for each other.
“This is a very special partnership… together, we have built and grown Endeavor from an annual revenue of $350 million when we first invested in 2012 to nearly $6 billion today,” he said.
“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… this commitment is among the largest in Silver Lake’s history and we are all in on working with the Endeavor team and our trusted anchor investors to create value by accelerating growth at scale.”
The Silver Lake acquisition is expected to close by the end of the first quarter of 2025.