Private equity firm Silver Lake has agreed to acquire Endeavor Group Holdings (NYSE: EDR), the entertainment conglomerate chaired by Hollywood super-agents Ari Emanuel and Patrick Whitesell.

Silver Lake already owns 31% of Endeavor’s outstanding shares (it was an early investor). The firm will pay $27.50 in cash per share to buy out the remaining investors, valuing Endeavor at $13bn.

With this deal, Silver Lake has come full circle with Endeavor Group. The firm financed Endeavor’s acquisition-driven growth strategy and helped it mature into a publicly traded company. It’s now acquiring all of Endeavor to add to its $100bn+ portfolio.

Endeavor Group began as William Morris Endeavor (WME), one of Hollywood’s biggest talent agencies run by Emanuel and Whitesell. Over time, the company acquired many entertainment businesses, including sports agency IMG and martial arts promoter UFC, and morphed into a full-fledged conglomerate. Its acquisitions were financed mainly with equity and debt funding from Silver Lake.

• Endeavor Group listed its shares on the public markets in 2021 at a valuation of $10bn. In April 2023, the company spun off its prized UFC asset and merged it with wrestling promoter WWE to form TKO Group Holdings, a separate publicly traded company.

• Endeavor holds a 51% stake in TKO Group Holdings (NYSE: TKO) worth roughly $8bn. Silver Lake will assume control of that stake after acquiring Endeavor.

Here are some interesting bits from SEC filings regarding the buyout:

• Endeavor chief executive Ari Emanuel will receive a $25mn cash bonus once the acquisition closes. He’s also entitled to 2.5% of net profits from the WME talent agency business.

• Silver Lake will provide $250mn seed funding to a new media company led by Endeavor Chairman Patrick Whitesell. If Whitesell isn’t appointed Chairman of the WME talent agency after the acquisition, he’s entitled to a one-time $60mn cash bonus. But if he gets the position, he’s entitled to 2.5% of net profits from the talent agency business, just like Emanuel.

• Endeavor Group President Mark Shapiro will receive as much as a $100mn bonus from the merger, contingent on various factors. His annual base salary has been hiked from $3mn to $7mn, and he’ll receive a $15mn guaranteed annual bonus while employed at the newly private Endeavor.

• Silver Lake owes Endeavor a $705mn termination fee if it walks away from the deal. Endeavor owes Silver Lake a $289mn breakup fee if it accepts another acquisition offer.

The acquisition is expected to close in the first quarter of 2025.

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