Endeavor Raising $1.75 Billion to Buy Rest of UFC as Musk Joins Board
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Endeavor Group Holdings is buying up the rest of Ultimate Fighting Championship as part of its bid to go public, according to the preliminary prospectus filed by Endeavor with the Securities & Exchange Commission Wednesday afternoon.
Endeavor and UFC entered a deal on Feb. 16 to buy the 49.9% of the UFC that Endeavor doesn’t own in exchange for units in Endeavor, according to the document. Since Endeavor’s IPO filing is preliminary, it doesn’t yet include most financial information that will be disclosed to investors as the IPO process proceeds. That means the prospectus today doesn’t specify a value on the transaction, though it does disclose that Endeavor will use at least $1.75 billion of $1.768 billion it is raising in a private placement to buy back some of the Endeavor units from UFC shareholders.
Also in the filing, Endeavor announced that it was nominating Elon Musk to join its board of directors, citing his executive work with Tesla and SpaceX as well as his “experience starting, growing and integrating businesses.”
Endeavor is an entertainment conglomerate that also owns talent agencies IMG and William Morris, and produces content for the NFL, English Premier League and the Olympics, among many other organizations. News of its filing for an IPO was first reported by Sportico. Endeavor, KKR and Silver Lake purchased UFC for $4 billion in 2016.
UFC is a high-cash flow business that would be beneficial to Endeavor as it makes a second attempt to go public. When Endeavor previously attempted an IPO in 2019, its filings said the promotion’s minority investors were allowed to request an IPO for the UFC itself once Endeavor was public. Those minority investors are primarily Silver Lake and KKR, which each owned 22.9% at the time of the 2019 filings. The business canceled a planned 2019 IPO because of market conditions. At that time, the business was seeking a $6.5 billion market value.
After the UFC transaction closes and a reorganization of the business is conducted as part of the IPO, Silver Lake and Endeavor executives Patrick Whitesell and Ari Emanuel will control more than 50% of the voting power of Endeavor, according to the filing. The private placement is occurring at $24 a share. Overall valuation or sharecount of the business isn’t disclosed in the preliminary document, however.
A representative for UFC didn’t immediately respond to a request for comment.
(This story has been updated with news of Elon Musk’s nomination to join the Endeavor board in the headline and the third paragraph.)
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