Endeavor Group Holdings has agreed to be purchased by private equity firm Silver Lake in a deal valuing the sports and entertainment company at $13 billion.
The company said that its majority shareholder Silver Lake will acquire 100% of Endeavor’s shares that it does not already own. It currently holds an approximately 31% stake.
Under the terms of the deal, Endeavor stockholders will receive $27.50 per share, representing a 55% premium to where shares traded in October 2023 when the company initiated its strategic review.
Shares of Endeavor traded higher on the news on Tuesday afternoon, up 2.3% at $25.85.
Endeavor is the majority owner of TKO Group Holdings, which comprises WWE and UFC. TKO is not a party to the transaction and will remain publicly traded.
The acquisition is expected to close by the end of the first quarter of 2025.
“We believe this transaction will maximize value for all of Endeavor’s public stockholders and are excited to continue to unlock and invest in the growth opportunities ahead as a private company,” Endeavor CEO Ariel Emanuel commented.
Analysts at Jefferies see the deal as favorable. They awarded Endeavor a ‘Buy’ rating and $29 price target
They noted that the agreement, which addressed transaction-related uncertainties around Endeavor, could potentially benefitting TKO shares as investor focus shifts back to fundamental performance.
They iniatited coverage on TKO with a ‘Buy’ rating and $120 price target in February, representing 40% upside at the time of writing.
“We again note that we see significant opportunity for TKO to outperform expectations, primarily driven by 1) upcoming UFC rights renewal; 2) further maximization of events; and 3) cost synergy realization,” they wrote.
TKO shares traded up 5.3% at about $91 on Tuesday afternoon.