Endeavor Group Holdings, Inc. (NYSE: EDR) has announced its agreement to be acquired by Silver Lake, a global technology investment firm, in partnership with the Endeavor management team and additional anchor investors. The acquisition will see Silver Lake acquire 100% of the outstanding shares it does not already own, with Endeavor stockholders receiving $27.50 per share in cash, representing a 55% premium to the unaffected share price of $17.72 per share at market close on October 25, 2023. This premium is also a 39% increase over Endeavor’s unaffected 30-day volume-weighted average price (VWAP).
The transaction is valued at $13 billion in equity, with a consolidated enterprise value of $25 billion. This makes it the largest private equity sponsor take-private in the last ten years, as well as the largest ever in the media and entertainment sector. On the unaffected date, the equity value was $8.2 billion, and the premium being paid by Silver Lake represents $4.6 billion more equity value to all Endeavor stockholders.
Silver Lake's belief in the potential of Endeavor is evident in the significant premium being delivered to stockholders. The firm's unwavering belief in Endeavor's leadership and potential growth has been highlighted by the growth of Endeavor from $350 million in annual revenue in 2012 to nearly $6 billion in consolidated revenue today.
The transaction is not subject to any financing condition and is expected to close by the end of the first quarter of 2025. After the completion of the transaction, Endeavor’s common stock will no longer be listed on any public market.
The premium value delivered by the transaction to Endeavor stockholders is substantially higher than the median premium in the low-to-mid-30% range paid in private equity sponsor take-privates larger than $10 billion in enterprise value over the last five years in the technology, media, entertainment, and telecommunications sector.
The financing for the transaction will be through a combination of new and reinvested equity from Silver Lake and additional capital anchored by Mubadala Investment Company, DFO Management, LLC, Lexington Partners, and funds managed by Goldman Sachs Asset Management. Additionally, equity will be rolled over by members of the Endeavor management team, and new debt financing fully committed by several major financial institutions.
The transaction is subject to customary closing conditions and required regulatory approvals, with no other stockholder approval necessary. Upon completion of the transaction, further information regarding terms and conditions contained in the definitive transaction agreements will be made available in Endeavor’s current report on Form 8-K.
This acquisition speaks to the confidence in Endeavor's potential for growth and expansion in the global sports and entertainment industry, and the significant premium being offered to stockholders underscores the value that Silver Lake sees in the company.
As of now, the acquisition is poised to reshape Endeavor’s future as it transitions to a private entity under the leadership of Silver Lake, the Endeavor management team, and additional anchor investors. The market has reacted to these announcements by moving the company's shares 2.4% to a price of $25.89. For more information, read the company's full 8-K submission here.
