Endeavor Valued at More Than $10B in New IPO, Seeks to Raise as Much as $588M

Endeavor is looking to raise as much as $588 million in its new IPO, moving the ball forward in its renewed effort to take the company public. The company officially unveiled plans for its new public offering March 31.

Endeavor is valued at more than $10 billion at its current valuation range of $23-$24 per share, when factoring in RSUs for top executives, according to its revised S-1 filing, which was submitted to the SEC on Tuesday morning.

Endeavor had previously sought to raise $600 million in its first IPO effort in 2019 at a valuation of about $6.5 billion, before ultimately calling off the offering after a lukewarm response from Wall Street.

This time around, things are different.

For starters, the company has already raised $1.7 billion in a private placement with Tencent, Elliott Management, Silver Lake and Third Point, among other investors. That private investment will be used to fund Endeavor’s buyout of UFC, which is one of the pillars of Endeavor’s new strategy and messaging around its “ownership of intellectual property.”

That new messaging positions Endeavor as a tech-focused company poised to take advantage of trends like sports betting and direct-to-consumer streaming, and de-emphasizes some of its legacy businesses, including its talent representation arm.

The changes stem in part from the novel coronavirus pandemic, which battered Endeavor’s businesses, but its owned sports segment (including UFC and Professional Bull Riders) saw its revenue increase year-over-year despite a lack of in-person ticket sales. As the world (hopefully) returns to normal, Endeavor is betting that those businesses can spur new growth opportunities, while its legacy businesses return to pre-pandemic levels.

At the same time, a settlement with the Writers Guild will mean that the company has to give up its majority stake in Endeavor Content, pushing it further into the sports and live events space as it reduces its role in scripted productions.

Top Endeavor managers Ari Emanuel and Patrick Whitesell would have stakes in the company totaling around $900 million, according to the filing. The biggest shareholder would be Silver Lake, with a stake valued at more than $4 billion.

In the revised S-1, Endeavor said that it will use the funds raised in both the private placement and IPO to fund the UFC buyout, adding that “we may also use a portion of the net proceeds from this offering and the concurrent private placements to fund our current or future joint ventures, investments or acquisitions of complementary businesses or other assets, including the Reigning Champs Acquisition.”

Reigning Champs is an athlete prep business that the company says it is acquiring for some $200 million.