Endeavor Pushes Planned IPO Until September or Later

WME parent company is looking to acquire live-events company On Location Experiences LLC for as much as $700 million

Last Updated: August 2, 2019 @ 3:38 PM

Endeavor Group Holdings is pushing the date for its planned initial public offering to September or later as the company looks to close an acquisition ahead of going public, according to an individual familiar with the situation.

The company, which operates one of Hollywood’s premier talent agencies in William Morris Endeavor, had previously planned to list its shares on the New York Stock Exchange this summer. In addition to WME, Endeavor owns the Ultimate Fighting Championship and the Miss Universe Pageant, and is looking to diversify its business with an acquisition of live-events company On Location Experiences LLC for as much as $700 million.

Endeavor leadership also hopes to garner a higher valuation by touting its second-quarter earning results and renegotiated contracts for soccer events, the individual said.

A rep Endeavor declined to comment.

Endeavor hasn’t publicly disclosed how much it’s planning to raise in a public offering, but the insiders told the Wall Street Journal (which first reported the news) that the company hopes to raise roughly $500 million and seek a valuation of between $7 billion and $8 billion.

In 2012, Endeavor, then called William Morris Endeavor Entertainment, sold a 31% minority stake to private equity film Silver Lake Partners for $200 million. That investment helped propel the company’s growth, including the 2014 acquisition of media, sports and fashion company IMG for $2.3 billion.

Endeavor then bought the Miss Universe Pageant from Donald Trump in 2015, and followed that deal by acquiring the Ultimate Fighting Championship in 2016 for $4.0 billion. These acquisitions, especially that of UFC, required the assumption of considerable debt.

In the company’s 150 plus-page prospectus filed in May, Endeavor reported that it generated $3.61 billion in revenue in 2018, and had a net income of $231.30 million after two years of losses (Endeavor had a net loss in 2016 of $98.32 million followed by a net loss of $173.16 million in 2017).

As of March 31, the company said it had $499.71 million in cash and cash equivalents, as well as $9.89 billion in total assets. Endeavor’s total long-term debt tallies $4.62 billion.

Endeavor’s delayed plan to go public comes amid an ongoing dispute between the agency (as well as the Association of Talent Agents) and the Writers Guild of America over the practice of TV show packaging and, as the WGA sees it, a growing conflict of interest for Hollywood’s top talent agencies.

Hundreds of Hollywood writers have severed their ties to WME over the matter.

Endeavor expressed some concern over the dispute in its filing. The company recognized WME’s reliance on certain franchise agreements with unions and guilds as a risk factor.

“The outcome of the dispute, including the commercial landscape that will exist in the future between writers and agents, could have an adverse effect on our business,” Endeavor said in the SEC filing.