Endeavor, the sports and entertainment company led by the Hollywood superagent Ari Emanuel, said on Tuesday that it planned to go private, nearly three years after joining the public stock markets.
The transaction — led by Silver Lake, the investment firm that has been Endeavor’s longtime financial backer — is meant to usher in a new era for Endeavor, whose ambitious growth story failed to gain traction on Wall Street.
Under the terms of the deal, Silver Lake will buy the shares in Endeavor that it doesn’t already own for $27.50 a share in cash. That price is 55 percent above where Endeavor’s shares were trading on Oct. 25, the day before the company said it was weighing deal options.
The transaction values Endeavor at about $8.2 billion. Including its debt, the company is valued at $13 billion, making the acquisition among the biggest by a private equity firm this year.
For more than a decade, Mr. Emanuel and his business partner, Patrick Whitesell, sought to turn what had started as a talent agency — with clients like Dwayne Johnson and Ben Affleck — into a new kind of media powerhouse: an organization that comprised not only the top talent in sports, entertainment and fashion but the content businesses to spotlight that talent. It was a vision that differed from rivals like Creative Artists Agency, which also took on outside investors but stuck largely with a traditional agency business.
Guiding the firm was the unlikely pairing of Mr. Emanuel, satirized by Jeremy Piven on the HBO show “Entourage” as a hyper-aggressive shouter, and Egon Durban, the cerebral deal maker behind some of Silver Lake’s biggest transactions.
Silver Lake invested in Endeavor in 2012, with Mr. Durban taking a top advisory role. A flurry of acquisitions followed, including IMG, a sports and fashion-focused agency; Professional Bull Riders; New York Fashion Week; and technology for sports betting.
Most notably, Endeavor bought Ultimate Fighting Championship for $4 billion in 2016, betting on the power of mixed martial arts to draw live entertainment dollars. Last year, Endeavor acquired World Wrestling Entertainment to combine with U.F.C. in a publicly traded company called TKO Group, hoping to draw even more profit from selling rights to live fights.
But some of the bets haven’t exactly panned out.
While Endeavor had once hoped to profit from “packaging” — the creation and selling of content that teamed up writers with other clients — a dispute with writers’ unions forced it to sell a majority stake in its in-house studio.
And while Endeavor had thought TKO Group would be a powerful draw for Wall Street investors, shares in the company remain below their debut price. (That company will remain publicly traded.)
Endeavor executives had also hoped that the sale of a majority stake in Creative Artists Agency to François-Henri Pinault, the French luxury mogul, at a rich $7 billion valuation would help lift their own company’s valuation. But Endeavor’s shares drifted down after that deal was announced.
The hope now is that by delisting, Endeavor can continue to make ambitious investments without being second-guessed by public-market shareholders. It will continue to have the backing of Silver Lake, which is effectively doubling down on Mr. Emanuel, Mr. Whitesell and their team.
“This is a very special partnership,” Mr. Durban of Silver Lake, who is also Endeavor’s chairman, said in a statement. “We are all-in on working with the Endeavor team and our trusted anchor investors to create value by accelerating growth at scale.”
Silver Lake is now deeply committed to Endeavor’s success: It already controlled about 70 percent of Endeavor’s voting rights, and said it wasn’t interested in selling its stake in the company. Still, the deal was negotiated with a special committee of Endeavor’s independent directors on behalf of other shareholders.
Silver Lake knows how to take big companies private, retool them and take them public again. It helped Michael S. Dell, the technology mogul, buy out other shareholders in the company that bears his name and brought it back to the stock markets.
Mr. Dell’s family office, DFO Management, is helping to finance the transaction, along with Mubadala, the Abu Dhabi sovereign wealth fund; the investment firm Lexington Partners; and the asset management arm of Goldman Sachs.
Source Agencies
