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Endeavor IPO expected to raise over $600m as share price named

Endeavor, the talent agency and sports and entertainment group that owns talent management company IMG, expects to issue 19.4 million shares at a price of between $30 (€27.06) and $32 per share when it launches its initial public offering (IPO) later this year.

Details of the offering have been released in a filing to the US Securities and Exchange Commission and Endeavor expects to raise upwards of $600m during the IPO process. The proposed maximum aggregate offering price has been set at $712.3m.

After filing the necessary IPO paperwork in May, it was initially expected that Endeavor would list on the New York Stock Exchange by August, but the IPO was subsequently delayed. It was reported that Endeavor was first looking to finalise its acquisition of On Location Experiences, the hospitality, ticketing and live events company, for around $675m.

Endeavor’s IPO is expected to value the company at between $7.9bn and $8.3bn, depending on the final price of the stock.

The filing submitted yesterday by Endeavor details the breakdown of Endeavor Group Holdings upon completion of “the reorganisation transactions and this offering” and assuming a midpoint IPO price of $31 per share and a $600m offering size.

The breakdown includes the 19.35m shares to be held by investors in the IPO, plus 52.4m shares held by Silver Lake Partners and related parties, along with 57.5m shares held by affiliates of Endeavor’s “other pre-IPO investors.”

Last month, Endeavor reported first-half revenues of $2.05bn and adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of $249.7m, as the effect of a trio of hefty football media-rights contracts was felt. The financial results, as reported by SportBusiness, particularly highlighted the impact of IMG’s international media-rights distribution deals for Serie A, LaLiga and the FA Cup, with all three contracts beginning at the start of the 2018-19 season.

Endeavor’s operations are split into three main divisions: Entertainment and Sports (including rights trading); Representation (of talent); and Endeavor X (the direct-to-consumer and business-to-business streaming services).

The Entertainment and Sports segment comfortably generates the highest slice of revenues, and posted $1.33bn in first-half revenues, a 46.4-per-cent year-on-year rise.

Approximately $352m of the total $422.4m increase was attributable to the sale of media rights – chiefly through the trio of football rights contracts – but also the media rights and residential pay-per-view contracts between the Endeavor-owned UFC and US sports broadcaster ESPN. Growth at IMG Arena, IMG’s betting business, plus owned events and sports production were also credited for the overall revenue rise.

First-half adjusted Ebitda at the Entertainment and Sports segment was $187.6m, up 9.8 per cent on the figure posted 12 months earlier.

Endeavor acquired IMG for $2.3bn in 2013 and then went on buy UFC in 2016 for an initial $3.8bn.