TKO, the mum or dad firm of WWE and UFC introduced on Thursday morning that they’ve acquired Skilled Bull Riders, On Location, and IMG from Endeavor.
You possibly can learn the press launch under:
TKO Pronounces Approval of Capital Return Program; Additionally Pronounces Strategic Acquisition of Sports activities Belongings From Endeavor
TKO Pronounces Approval of Capital Return Program; Additionally Pronounces Strategic Acquisition of Sports activities Belongings From Endeavor
Board Approved $2 Billion Share Repurchase Program and Authorised Initiation of Quarterly Money Dividend Program of $75 Million
All-Fairness Transaction Consists of Skilled Bull Riders, On Location, and IMG
Particular Committee of TKO’s Impartial Administrators Unanimously Advisable Approval of Transaction
NEW YORK–(BUSINESS WIRE)– TKO Group Holdings, Inc. (“TKO”) (NYSE: TKO), a premium sports activities and leisure firm, introduced immediately that its board of administrators has approved a share repurchase program of as much as $2.0 billion of its Class A typical inventory and the initiation of a quarterly money dividend program pursuant to which holders of TKO’s Class A typical inventory will obtain their professional rata share of $75.0 million in quarterly distributions to be made by TKO Working Firm, LLC.
Additionally immediately, TKO introduced it has reached a definitive settlement with Endeavor Group Holdings, Inc. (“Endeavor”) (NYSE: EDR) to accumulate Skilled Bull Riders (“PBR”), On Location, and IMG in an all-equity transaction valued at $3.25 billion. Along with complementing TKO’s current core UFC and WWE companies, the strategic acquisition of those sports activities and hospitality property from Endeavor expands TKO’s operational footprint within the fast-growing premium sports activities market and permits direct participation within the upside from associate leagues and occasions.
Ariel Emanuel, Government Chair and CEO of TKO, mentioned: “At this time’s bulletins mirror the continued energy of our underlying enterprise and our dedication to deploying capital by a balanced capital allocation technique, together with by our share repurchase program and quarterly money dividend program. This underscores our continued concentrate on delivering sustainable long-term worth for our shareholders.”
Mark Shapiro, President and COO of TKO, mentioned: “PBR, On Location, and IMG are industry-leading property that meaningfully improve TKO’s portfolio and strengthen our place in premium sports activities globally. Inside TKO, they are going to assist energy the expansion of our income streams and place us to seize much more upside from among the most tasty elements of our sports activities ecosystem: media rights, dwell occasions, ticket gross sales, premium experiences, model partnerships, and web site charges. These property are already constructed into our enterprise technique at TKO and can serve to additional improve our robust observe document of execution throughout UFC and WWE.”
TRANSACTION EXPANDS TKO’S LEADERSHIP AND POWERS GROWTH IN PREMIUM SPORTS
PBR is the world’s premier bull using league organizing greater than 200 annual dwell occasions, welcoming roughly 1.25 million followers, and reaching greater than 285 million households in additional than 65 territories. PBR CEO and Commissioner Sean Gleason will proceed to steer the group.
On Location is a number one supplier of premium experiences for followers attending greater than 1,200 sporting occasions, together with the Tremendous Bowl, Ryder Cup, NCAA Remaining 4, FIFA World Cup 26, and the 2026 and 2028 Olympic and Paralympic Video games, along with year-round dwell occasions organized by UFC and WWE. On Location president Paul Caine will proceed to steer the group.
IMG is likely one of the world’s largest world distributors and producers of sports activities content material, packages and sells media rights and model partnerships, and supplies industry-leading strategic consultancy, digital companies, and occasion administration for greater than 200 rightsholders. Shoppers embody the Nationwide Soccer League, English Premier League, Worldwide Olympic Committee, Nationwide Hockey League, Main League Soccer, ATP and WTA Excursions, the All England Garden Tennis & Croquet Membership (Wimbledon), EuroLeague Basketball, DP World Tour, and The R&A, in addition to UFC, WWE, and PBR. The acquisition of IMG doesn’t embody companies related to the IMG model in licensing, fashions, and tennis illustration, nor IMG’s full occasions portfolio. Adam Kelly will lead IMG as president.
Transaction Particulars
Below the phrases of the settlement, TKO will purchase the Endeavor property for a complete consideration of $3.25 billion, primarily based on the 25-trading-day volume-weighted common value of TKO’s Class A typical inventory for the interval ending on October 23, 2024. Endeavor will obtain roughly 26.14 million frequent models of TKO Working Firm, LLC and can subscribe for an equal variety of shares of TKO’s Class B frequent inventory, with Endeavor anticipated to personal roughly 59% of TKO alongside the opposite current TKO shareholders, who will personal the remaining 41% upon completion of the transaction. The transaction can also be topic to buy value changes to be settled in money and fairness.
TKO fashioned a Particular Committee of impartial administrators of the board to evaluate, negotiate, and contemplate the proposed transaction. The Particular Committee reviewed, negotiated, unanimously authorized, and really helpful approval of the proposed transaction by TKO’s board of administrators. Following formal and unanimous approval by TKO’s board of administrators, the definitive settlement was signed, and the transaction was authorized by the written consent of stockholders representing a majority of the excellent voting pursuits of TKO.
The transaction is topic to the satisfaction of customary closing circumstances and required regulatory approvals. No different stockholder approval is required. The transaction is anticipated to shut within the first half of 2025.
Advisors
Morgan Stanley & Co. LLC is serving as monetary advisor to TKO. Latham & Watkins LLP is serving as authorized advisor to Endeavor. Moelis & Firm LLC is serving as monetary advisor to the particular committee and Skadden, Arps, Slate, Meagher & Flom LLP as authorized advisor to the particular committee.
CAPITAL RETURN PROGRAM
TKO will decide at its discretion the timing and the quantity of any repurchases primarily based on its analysis of market circumstances, share value, and different components. Repurchases underneath the share repurchase program could also be made within the open market, in privately negotiated transactions or in any other case, and TKO shouldn’t be obligated to accumulate any specific quantity underneath the share repurchase program. The share repurchase program has no expiration, is anticipated to be accomplished inside roughly three to 4 years and could also be modified, suspended, or discontinued at any time.
TKO’s dividend will likely be paid quarterly to TKO’s Class A typical shareholders. TKO intends to start making quarterly money dividend funds on March 31, 2025. Future declarations of quarterly dividends are topic to the dedication and discretion of TKO primarily based on its consideration of assorted components, akin to its outcomes of operations, monetary situation, market circumstances, earnings, money stream necessities, restrictions in its debt agreements and authorized necessities and different components that TKO deems related.
The share repurchase program authorization and approval to provoke a quarterly money dividend program are separate from and should not conditional upon TKO closing the acquisition of PBR, On Location, and IMG.
Webcast
TKO will make public a recorded audio webcast at 8 a.m. ET immediately to debate this transaction and capital return program. Administration may also present an replace on TKO’s anticipated outcomes for the third quarter of 2024 and full-year steering expectations, which will likely be reported on TKO’s earnings name scheduled for Wednesday, November 6, 2024, 5 p.m. ET / 2 p.m. PT. At this time’s audio webcast and the accompanying presentation supplies will be accessed at investor.tkogrp.com. The hyperlink to the webcast, in addition to a recording, may also be accessible on the web site after the decision concludes.
