Endeavor — the parent company to the UFC — is seeking to raise more than $620 million with an initial public offering (IPO) later this year.
According to new financial documentation filed by the company, Endeavor expects a sale price between $30 to $32 per share when the organization goes public with the IPO. The company believes the sale of 19.4 million shares will raise more than $600 million with nearly 3 million more shares potentially being offered to underwriters for the IPO.
Endeavor, which originally started as a powerhouse talent agency in Hollywood, plans on using $500 million of the money raised to pay down outstanding debts on the company’s balance sheet. Endeavor spent more than $4 billion back in 2016 to purchase the UFC with numerous other high-profile additions to the company in recent years that accrued substantial debt.
Endeavor will then target approximately $46.8 million from the IPO to use as working capital and for corporate purposes not to mention future acquisitions for the company.
Under the agreement for the upcoming IPO, Endeavor CEO Ari Emanuel and chairman Patrick Whitesell will each control 18.7 percent of the company stock.
Because of the classification of the different kinds of stock being opened up for the IPO, Emanuel and Whitesell along with their partners at Silver Lake — a private equity firm heavily invested in Endeavor — will retain enough voting power to ultimately retain control over the company and any major decisions made going forward.
Endeavor has been carefully plotting plans to take the company public after rumors swirled for years that the organization was headed in that direction.
Wall Street speculators have cast some doubt on the long term viability of Endeavor due to the volatile nature of the agency business not to mention the ups and downs of the UFC because of the star power needed to draw bigger numbers on pay-per-view.
The good news for the UFC, many of the concerns raised about the mixed martial arts promotion were answered thanks to a multi-year deal inked with ESPN for television broadcast rights as well as the recent contract for the Disney-owned company to take over as the pay-per-view partner as well.