Report: Endeavor to file IPO by the end of the year

March 29, 2019

The Wall Street Journal reports that Endeavor, the owner of the UFC, is planning for an IPO by the end of the year.

According to the report, the IPO will be used to broaden Endeavor’s businesses beyond film and television.

Endeavor purchased the UFC in 2016 for $4 billion.  It also acquired sports marketing agency 160over90 for approximately $200 million.  It also owns the Professional Bull Riders and the Miss Universe organization.

The proposed IPO may allow private-equity firms Silver Lake and Japanese conglomerate SoftBank Group to obtain their initial investment.

According to the Financial Times, Endeavor was valued at $6.3 billion in August 2017 including its debt when it raised money following a $1 billion investment from the Canada Pension Plan Investment Board and GIC, Singapore’s sovereign wealth fund.

Payout Perspective:

Moody’s reported that Endeavor had “suffered from weaker than expected results due to lower levels of profitability from multi-year international media sports rights contracts that will lead to elevated leverage levels going forward.”  The debt load increased to 8.4x multiples as of the third quarter in 2018 which represented a rise causing a concern over default potential.  It would seem that an IPO would allow for cash flow to allow for more investment while allowing for it to address the concern over debt. It would also mean greater transparency as the company would have to make quarterly reports and deal with conference calls and all that goes with public filing.

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