CAA to Raise $393 Million to Buy Equity From Employees

Courtesy of CAA

The move represents a potential liquidity event for top earners at the agency in a similar fashion as an IPO might have.

CAA is in the process of raising about $393 million largely to buy back equity from agents and top executives, The Hollywood Reporter learned Wednesday.

Sources say the agency's goal is to borrow $1.15 billion in a seven-year loan in order to refinance at more favorable terms $757 million in debt while banking what remains to be used in a one-time share repurchase of employee shares.

The move represents a potential liquidity event for top earners at CAA in a similar fashion as an IPO might have, since the company has no plans to go public in the wake of rival Endeavor's failed attempt to do so.

Those who are familiar with the plan say that employees with equity will be able to sell less than half of their stakes in CAA but are under no obligation to sell anything.

Arrangers of the deal include current stakeholder TPG along with Bank of America, Credit Suisse, UBS and others.

The event is similar to those in 2010 and 2014 when TPG invested in CAA and top stakeholders took some profit. CAA has some 2,000 employees and Bryan Lourd, Richard Lovett and Kevin Huvane will presumably be able to sell shares along with many more, though the bulk of the employees have no equity to sell.

CAA and TPG declined to comment.