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WME owner Endeavor to go private again after three-year run as a public company

Wendy Lee, Los Angeles Times on

Published in Business News

Endeavor, the owner of Hollywood talent agency WME, said Tuesday that it will be taken private by its largest investor, Silver Lake, three years after the Beverly Hills-based entertainment giant made its stock market debut.

Under the deal, Silver Lake, the private equity firm based in Menlo Park, will acquire all outstanding shares of Endeavor that it does not own. Endeavor stockholders would get $27.50 per share in cash, a 55% premium over the closing price of $17.72 before Endeavor announced its plan last year to consider strategic alternatives. The company said it is being acquired at an equity value of $13 billion.

"We believe this transaction will maximize 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," Endeavor Chief Executive Ari Emanuel said in a statement.

Endeavor-backed TKO, the publicly traded venture that owns UFC and WWE, is not party to the transaction, the company said.

Over the years, Endeavor has become increasingly diversified, owning not just WME and UFC but also Professional Bull Riders, live events experiences business On Location and other entertainment-related concerns. Although Endeavor executives were bullish that these different parts of entertainment would form a cohesive and successful business, some investors were skeptical.

Even Emanuel admitted in a discussion at Bloomberg's Screentime conference last year that "our Endeavor story was a little confusing" for Wall Street.

 

The company first planned for an initial public offering of stock in 2019 but later pulled it back because of unstable market conditions. Like other entertainment companies, Endeavor was hard hit by the COVID-19 pandemic and laid off hundreds of staff members as many live events and Hollywood productions were shut down or suspended.

In 2021, Endeavor had its IPO, but the company's stock struggled to deliver the returns that investors wanted.

Endeavor has taken steps to try to boost its stock, including a deal last year to merge its UFC business with World Wrestling Entertainment in a new publicly traded company called TKO.

But Endeavor took a further financial hit from the dual writers' and actors' strikes last year; its chief financial officer estimated the strikes cost the company about $25 million in revenue each month.

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