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Endeavor upping UFC ownership to 100% ahead of going public – MMA Root

Endeavor increases its stake in UFC to 100% of the company before a scheduled initial public offering, opening the company to institutional and retail investors.

When Endeavor acquired the UFC from Zuffa LLC for just over $ 4 billion in 2016, it owned 50.1% of the company. The rest belonged to other investment partners. With plans to publish the group, Endeavor agreed to buy the rest of the UFC from these other investors.

Endeavor originally planned to launch in 2019, but broke those plans when it emerged that the market would not support what they wanted to get out of a public offering.

The new UFC acquisition plan, outlined in Endeavor’s filing with the SEC for publication, was a move to strengthen Endeavor’s bottom line and make the IPO more attractive to investors.

According to the S-1 deposit, the UFC in conjunction with the Professional Bull Riders (PBR) and the Euroleague Basketball accounted for 20% of Endeavor revenue in 2019.

If the various parts of the deal do not meet as planned, the UFC ownership structure will return to its current state, leaving Endeavor with a 50.1% ownership stake.

Buy UFC (as described in S-1)

On February 16, 2021, the Endeavor Operating Company entered into a Transaction Agreement (the “Transaction Agreement”) with the Other UFC Holders and some of their affiliates under which the Endeavor Operating Company will acquire direct or indirect holdings in the UFC Parent ( including UFC Parent warrants or equity received from warrant holders from the exercise of UFC Parent warrants) by other UFC holders (or their subsidiaries) resulting in Endeavor Operating Company directly or indirectly holding 100% of the UFC Parent (the “UFC Market”). We now own 50.1% of UFC Parent’s equity and have consolidated UFC Parent ‘s financial results since the acquisition of UFC in 2016.

The effort points out that it overcomes the pandemic challenges as a strength of the company

“As demanding as a year like 2020 was, it underscored the strength, creativity and resilience of our people who mobilized again and again against overwhelming returns. We made difficult decisions, but we worked as a team to find creative solutions and put the best position in the business for the future, “said Endeavor CEO Ari Emanuel.

“As the global pandemic unfolded, we developed the necessary protocols to help our businesses safely restart operations, providing a model for other professional sports, events and programs. The UFC and PBR were two of the first sports organizations to return responsibly last spring and we watched the summer hosting the WNBA season at the IMG Academy. In the fall, we brought New York Fashion Week to life, and it became one of the first big events to start again in New York.

“We believe that the public company will enable us to accelerate this mission and advance the vision we set in 1995 to build a company to lead the world.”

An interesting footnote to Endeavor is that Tesla and SpaceX CEO Elon Musk would sit on the company’s board.

UFC officials have not yet commented on the takeover or what it would mean or Endeavor’s IPO for the company.

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