Lights, Camera, Action: Endeavor back in Private Hands

Just three years after going public, sports and entertainment giant Endeavor announced it will be going private via an acquisition by private equity firm Silver Lake. Silver Lake already owns 71% of Endeavor’s voting shares and will be purchasing the remainder in an all cash acquisition that values the company at $13 billion. The transaction is not expected to close until the first quarter of 2025, pending regulatory approval.

“[T]he combined total enterprise value of $25 billion will make this the largest private equity sponsor public-to-private investment transaction in over a decade, and the largest ever in the media and entertainment sector,” according to the deal’s press release. “On the unaffected date, the equity value was $8.2 billion, and the premium to be paid by Silver Lake represents $4.6 billion more equity value to all Endeavor stockholders.”

Endeavor has faced a wild ride throughout its history. In 2009, Endeavor Talent Agency and the William Morris Agency merged to form William Morris Endeavor. The company acquired media company IMG in 2013 and Miss Universe Organization in 2015 before leading an investment group in acquiring Ultimate Fighting Championship (UFC) and other ventures.

The company filed to go public in 2019, only to postpone the offering the day before due to a lawsuit with UFC fighters as well as poor performance of other IPOs during that time. The company tried again in 2021 and succeeded in going public. Then just two years later in 2023, UFC and wrestling giant WWE merged to create a separate public company called TKO, with Endeavor owning 51%. Despite Endeavor going private, TKO will remain publicly traded.

Source: University of Florida

With the additional reporting requirements and regulations that accompany being publicly traded, many companies are opting to go private – or remain so – despite the liquidity and other benefits of being publicly traded. Rather than face the pressure of hitting quarterly numbers to avoid shares falling, many companies would rather the longer-term focus that being private may enable. As such, the number of public companies has dwindled significantly from the “dot com” boom of the late 1990s. 

Source: Nasdaq

Further, companies often underperform following their public offering. In fact, nearly two thirds of companies are underperforming the market just three years out from their IPOs.

According to DealPulse’s M&A database, which harnesses both AI and attorneys to digest the granular deal points of publicly announced transactions, Endeavor is advised by law firms
Latham & Watkins LLP and Cravath, Swaine & Moore LLP and Silver Lake is advised by
Simpson Thacher & Bartlett LLP and Kirkland & Ellis LLP.