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Endeavor has struck a deal to get a controlling 100% stake in the UFC.
The deal was revealed in a 300-page prospectus filed with the Securities and Exchange Commission (SEC) on Wednesday as Endeavor Group Holdings officially prepares to list the company.
Here’s the disclosure as part of Endeavor’s massive prospectus ahead of a planned Initial Public Offering (IPO) that will likely take place later this year.
“On February 16, 2021, Endeavor Operating Company entered into a transaction agreement with the other holders of UFC and certain of their affiliates pursuant to which Endeavor Operating Company will directly or indirectly acquire interests in UFC Parent (including warrants of UFC ‘UFC Parent or common shares received by holders of warrants from the exercise of warrants of the parent company UFC) from other holders of UFC (or their affiliates), so that Endeavor Operating Company directly owns or indirectly 100% of the holdings of parent company UFC (the “UFC Redemption”).
“We currently own 50.1% of the common shares of UFC Parent and have consolidated the financial results of UFC Parent since the date of the acquisition of UFC in 2016.”
As part of the transactional buyback, some of the former owners of UFC stock will receive shares of Endeavor Group Holdings, which is the name of the conglomerate that will go public. The prospectus also says Endeavor will raise $ 1.7 billion to buy out the rest of the UFC. But if the business does not go public, the old ownership structure will remain.
When Endeavor struck a deal to get a controlling stake in UFC in 2016 for just over $ 4 billion, the company partnered with several private equity firms to help raise the cash needed to sell. . These private equity firms, including Silver Lake Partners, ended up owning around 40% of UFC.
This new buyout will now give Endeavor a 100% controlling interest in the UFC, helping to soften the pot as the company prepares to go public.
As part of the prospectus filed on Wednesday, Endeavor also reported revenue of $ 3.478 billion as well as loss of net income of $ 625 million in 2020, largely due to the coronavirus pandemic which wiped out a much of their activities. The UFC has been a huge benefactor in helping Endeavor turn a profit last year after the MMA promotion held events ahead of any other major sport in the United States, making it a very successful 2020 for the UFC. company as a whole.
Endeavor had already filed for a stock market application in 2018, but a volatile stock market – other high-profile companies like Peloton were also hit after an IPO – and a very public row with the Writer’s Guild of America has left them disgusted. investors on the long-term outlook. for the company. (Editor’s note: The Vox Media Union is represented by the Writer’s Guild of America.)
Most recently, Endeavor finally struck a deal with the Writer’s Guild of America that will once again allow the company’s talent agency to represent writers after a tumultuous two-year standoff.
As part of the prospectus, Endeavor also announced that Elon Musk – best known as CEO of Tesla – has been appointed to join the company’s board of directors.
“As difficult as 2020 is, it highlighted the strength, creativity and resilience of our employees who have repeatedly mobilized in the face of overwhelming odds,” said Ari Emanuel, CEO of Endeavor, in the prospectus filed this week. “We made tough decisions, but worked as a team to find creative solutions and best position the company for the future.
“As the global pandemic unfolded, we developed the necessary protocols to help our businesses safely restart operations, providing a model for other sports, events and professional programs. The UFC and PBR were two of the first sports organizations to responsibly return last spring, and we followed up this summer by hosting the WNBA season at IMG Academy. In the fall, we brought New York Fashion Week to life, becoming one of the first major events to resume in New York.
“We believe that being a public company will allow us to accelerate this mission and promote the vision we defined in 1995 to build a company where the world was going.”
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