TKO buying companies for $3.25 billion
The parent company of WWE and UFC is buying Professional Bull Riders, On Location, and IMG from Endeavor Group in an all-stock deal valued at US$3.25 billion.
The sale to parent company TKO is part of Endeavor’s efforts to shed some of its assets as it looks to be taken private in a proposed transaction with private equity firm Silver Lake, which was announced in April. Ariel Emanuel, who serves as CEO of Endeavor, is also executive chair and CEO of TKO.
Professional Bull Riders is a bull riding league that has more than 200 annual live events, approximately 1.25 million fans, and reaches more than 285 million households in more than 65 territories. On Location is a live event company for more than 1,200 sporting events, such as the Super Bowl, Ryder Cup and NCAA Final Four. IMG is a distributor and producer of sports content, packages and sells media rights and brand partnerships, and provides consulting, digital services and event management to clients such as the National Football League and National Hockey League.
The Associated Press and IMG co-own the joint venture SNTV, which distributes sports video and highlights around the world.
Parent company TKO Group said Thursday that the acquisition from Endeavor Group will complement its existing businesses as well as broaden its reach in the premium sports market.
“PBR, On Location, and IMG are industry-leading assets that meaningfully enhance TKO’s portfolio and strengthen our position in premium sports globally,” TKO Chief Operating Officer Mark Shapiro said in a statement. “Within TKO, they will help power the growth of our revenue streams and position us to capture even more upside from some of the most attractive parts of our sports ecosystem: media rights, live events, ticket sales, premium experiences, brand partnerships, and site fees.”
As part of the deal, Endeavor will receive about 26.14 million common units of TKO Operating Co. and will subscribe for an equal number of shares of TKO’s Class B shares. Endeavor is expected to own approximately 59 per cent of TKO, while TKO’s existing shareholders will own the remaining 41 per cent upon completion of the transaction.
“By expanding its presence in the premium sports market, TKO is poised to unlock new revenue streams through media rights, live events, ticket sales, premium experiences, brand partnerships, and site fees,” Randal Konik of Jefferies said in a note to clients. “This strategic move not only strengthens its market position but also sets the stage for sustained growth and increased shareholder value.”
The deal is expected to close in the first half of next year.
TKO Group also announced Thursday that its board has approved the repurchase of up to US$2 billion of its common stock.
Shares of TKO Group Holdings Inc., based in Stamford, Conn., slumped more than 8 per cent in midday trading on Thursday.
