Business News: UFC owner Endeavor raises $511 million in IPO.
Endeavor Group Holdings Inc, owner of the Ultimate Fighting Championship (UFC), said Wednesday that it sold shares in an initial public offering (IPO) at the high end of the target range to raise $ 511.2 million. Endeavor has set a price of 21.3 million shares at $ 24 per share. The company had previously valued the shares at $ 23 to $ 24 each.
The IPO values Endeavor at $ 10.31 billion. This is Endeavor’s second attempt to go public after a failed attempt in 2019. Hence, the Beverly Hills, California-based company dropped its $ 400 million offer a day before it was made public due to the weak investor demand.
Analysts had warned that Endeavor was a risky bet for investors due to the volatile nature of its many businesses, which include a powerful talent agency, live events business, and sports properties like UFC and Professional Bull Riders.
Last year was a serious test case for Endeavor after the global pandemic shut down many of the industries in which the company operates, particularly with film and television productions suspended due to restrictions imposed by local governments. Eventually, Endeavor rebounded largely thanks to the UFC continuing to promote cards during the pandemic with UFC Fight Pass subscriptions increased 40% for the year, as well as reporting the highest pay-per-view sales. in the history of the company in 2020.
In a previous document, Endeavor revealed plans to acquire the 49.9% stake it does not already own in UFC. from private equity firm KKR and Silver Lake, using the proceeds from the IPO and a concurrent private placement of $ 1.77 billion from investors including Dragoneer, Fidelity, Elliott Management, Tencent and Third Point.
The company will go public on the New York Stock Exchange on Thursday under the symbol “EDR”. Morgan Stanley, Goldman Sachs, JP Morgan, KKR and Deutsche Bank Securities are the main underwriters of the company’s offering.
Emanuel, who was the inspiration for the character Ari Gold in the HBO series “Entourage”, added that the UFC has become a springboard for ideas that Endeavor has used for numerous other activities, including helping their clients in entertainment industry such as plans for the upcoming launch of NFT in June. Seeing the success the UFC has found in different areas from from social media to digital content, Endeavor can then use these lessons to help other areas of their business.
In addition to leveraging the UFC when Endeavor went public on Thursday, the company also added value to the name with Tesla CEO Elon Musk joining the board this year.
Of course, Endeavor’s launch as a publicly traded company doesn’t mean that control will wane from Emanuel or the other leaders of the company. Thanks to the numerous share classes offered, control of the vote will remain with the company with Emanuel retaining 17% of the voting rights, while Silver Lake, an investment company deeply involved with Endeavor, will retain approximately 68% of the voting power.