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TKO Group Holdings has reached a definitive agreement with Endeavor to acquire On Location, IMG and Professional Bull Riders (PBR) in an all-equity transaction valued at $3.25bn (£2.5bn/€3bn).
The board of directors has also authorised a share repurchase programme of up to $2bn of its Class A common stock, and the initiation of a quarterly cash dividend programme pursuant to which holders of TKO’s Class A common stock will receive their pro rate share of $75m in quarterly distributions, to be made by TKO Operating Company.
TKO’s existing core businesses include Ultimate Fighting Championship (UFC) and WWE, and the latest strategic acquisition will expand TKO’s operational footprint in the premium sports market. The premium sports and entertainment company is majority owned by Endeavor Group Holdings and was created in 2023 to oversee UFC and WWE.
IMG is a global distributor and producer of sports content and packages, and sells media rights and brand partnerships. It boasts clients such as the National Football League (NFL) in the US, the English Premier League, the International Olympic Committee (IOC) and more.
PBR is a bull riding league that organises more than 200 annual live events. Chief executive and commissioner Sean Gleason will continue to lead the organisation.
On Location is a provider of premium experiences, with partners including the NFL’s Super Bowl, golf’s Ryder Cup, and the men’s FIFA World Cup 2026, as well as the 2026 Olympic and Paralympic Winter Games, and the 2028 Olympic and Paralympic Games.
“These announcements reflect the continued strength of our underlying business and our commitment to deploying capital through a balanced capital allocation strategy, including through our share repurchase program and quarterly cash dividend program. This underscores our continued focus on delivering sustainable long-term value for our shareholders,” commented Ariel Emanuel, executive chair and chief executive of TKO.
Mark Shapiro, president and chief operating officer of TKO, added: “PBR, On Location, and IMG are industry-leading assets that meaningfully enhance TKO’s portfolio and strengthen our position in premium sports globally.
“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. These assets are already built into our business strategy at TKO and will serve to further enhance our strong track record of execution across UFC and WWE.”
It was also announced that Endeavor has commenced a review and potential sale of certain events within its IMG portfolio, including the Miami Open and Madrid Open, as well as ATP Masters 1000 and WTA 1000 tennis tournaments, and Frieze, a platform for modern and contemporary art.
The review follows the announcement earlier this year that saw Silver Lake agree to take Endeavor private, which includes the potential sale of certain businesses, excluding TKO Group Holdings and entertainment agency WME.
TKO will acquire the Endeavor assets for $3.25bn, based on the 25-trading-day volume-weighted average price of TKO’s Class A common stock for the period ending October 23, 2024. Endeavor will up its share in TKO, by receiving roughly 26.14 million common units of TKO Operating Company, and will subscribe for an equal number of shares of TKO’s Class B common stock. Endeavor is expected to own approximately 59% of TKO alongside the other existing TKO shareholders, who will own the remaining 41%.
The transaction is expected to close in the first half of 2025, with Morgan Stanley & Co serving as the financial advisor for TKO, and Latham & Watkins serving as legal advisor to Endeavor.
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