Endeavor Group Holdings Inc, the owner of the Ultimate Fighting Championship (UFC), announced Wednesday that it had sold shares in an IPO at the high end of the target range to raise $ 511.2 million. Endeavor has valued 21.3 million shares at a price of $ 24 per share. The company had previously valued the shares at $ 23 to $ 24 each.
The IPO valued Endeavor at $ 10.31 billion. This is Endeavor’s second attempt to go public after a failed attempt in 2019. Then the Beverly Hills, California-based company abandoned its $ 400 million offer the day before going public due to weak investor demand.
Analysts had warned that Endeavor was a risky bet for investors due to the volatility of its numerous companies, which include a high performing talent agency, as well as a live events company and sports real estate like UFC and Professional Bull Riders.
The past year has been a serious test for Endeavor after the global pandemic closed many of the industries the company operates in, particularly film and television productions that have been suspended due to restrictions imposed by local governments. Ultimately, Endeavor bounced back largely thanks to the fact that the UFC continued to advertise cards during the pandemic. UFC Fight Pass subscriptions rose 40 percent over the course of the year and in 2020 saw the highest pay-per-view revenue in the company’s history.
In a previous filing, Endeavor announced plans to acquire the 49.9% stake it does not yet hold in UFC from private equity firms KKR and Silver Lake. Proceeds from the IPO and a simultaneous private placement of USD 1.77 billion were used by investors such as Dragoneer. Loyalty, Elliott Management, Tencent and Third Point.
The company will be listed on the New York Stock Exchange on Thursday under the symbol “EDR”. Morgan Stanley, Goldman Sachs, JP Morgan, KKR and Deutsche Bank Securities are the primary insurers for the company’s offering.
Emanuel, who served as the inspiration for the character Ari Gold on the HBO series “Entourage,” added that the UFC has become a springboard for ideas that Endeavor has used for numerous other companies, including helping their clients in the Entertainment industry such as plans for the upcoming launch of NFTs in June. With the success that the UFC has achieved in various areas from social media to digital content, Endeavor can use these lessons to help other areas of their business.
In addition to leveraging the UFC when Endeavor went public on Thursday, the company has added value with the addition of Elon Musk, CEO of Tesla, to the board of directors this year.
Of course, Endeavor’s launch as a publicly traded company doesn’t mean losing control of Emanuel or the company’s other executives. Thanks to the numerous share classes offered, voting rights control remains with the company, with Emanuel retaining 17 percent of the voting rights, while Silver Lake, an investment company closely associated with Endeavor, retains around 68 percent of the voting rights.