Endeavor Makes Second Attempt At An IPO

Endeavor Group Holdings Inc. is taking a second crack at filing an amended prospectus with the Securities Exchange Commission. The original attempt to go public was in September 2019, but the plan was scrapped, citing hazardous market conditions. Owner of talent agency WME, Endeavor Content, and the UFC, Endeavor intends to sell 21.3 million shares valued between $23-$24 per share. Endeavor will use approximately $437 million to take full ownership of the UFC by purchasing the remaining 49% stake it doesn’t already own. Additionally, around $1.7 billion will be raised through private sale, with $1.3 billion from private investors, including Robert Kraft.

This time around, the IPO is set to raise around $511 million, giving the company a $10 billion valuation. The first attempted IPO was anticipated to raise as much as $600 million and valued the company at only $8 billion. Endeavor carries a heavy load of debt, listed at $5.92 billion in 2020. While the company generated $3.47 billion in revenue in 2020, it still finished the year in the red with a net loss of $625.3 million. The capital raised through the IPO can be used to rid a portion of that debt while fueling Ari Emanuel and Patrick Whitesell’s ambitions on establishing Endeavor as the media company of the future.

The IPO is expected sometime this year but could come sooner rather than later. Endeavor was hit hard by the COVID-19 pandemic, much like the rest of the entertainment industry. The pandemic forced the company to cut salaries and lay off employees across all divisions last March, and both Emanuel and Whitesell forwent their salaries for the year.

“As challenging a year as 2020 was, it underscored the strength, creativity, and resilience of our people who mobilized time and time again in the face of overwhelming odds. We made difficult decisions but worked as a team to find creative solutions and best position the business for the future,” wrote Emanuel in the prospectus’ letter from the CEO.

Despite the hardships introduced by the pandemic, Endeavor is seeking a valuation 25% higher than the original aborted IPO. The funds raised will be critical in continuing the expansion of the media conglomerate. In November 2019, it purchased the speaking-engagement firm Harry Walker Agency. It acquired On Location Experiences, an events business started by the National Football League, for $600 million in January of 2020. The IPO filing included mention two more acquisitions: college athlete preparatory business Reigning Champs for $200 million, and FlightScope, a data production and tracking tech firm focused on golf and tennis, for $35 million.

Endeavor’s IPO would be the first-ever by a Hollywood agency owner. Together with Emanuel and Whitesell, Silver Lake investment firm will hold 89% of the voting control through the company stock. The holdings will be traded on the New York Stock Exchange under the ticker EDR.