Stamford-based WWE (NYSE:WWE) has been acquired by Endeavor Group Holdings (NYSE:EDR), the parent company of UFC.
Endeavor will own a 51% controlling interest in the new company and existing WWE shareholders will hold a 49% interest in the new company. Under the terms of the transaction, existing WWE shareholders will roll all existing equity into the new entity that will be the parent company of UFC and WWE (“NewCo” until it is named at a later date) and intends to list on the New York Stock Exchange under the ticker symbol “TKO”. The listing of NewCo will expand the collective investor base to allow for broad market participation across Endeavor and NewCo.
According to the companies, the transaction values UFC at an enterprise value of $12.1 billion and WWE at an enterprise value of $9.3 billion. The transaction represents a contribution price of WWE of approximately $106 per share (before any post-closing dividend). Additionally, UFC and WWE will each contribute cash to the new company so that it holds approximately $150 million. At closing, Endeavor intends to sweep all excess cash at UFC, and shareholders of the new company (other than Endeavor) are expected to receive a post-closing dividend.
Ari Emanuel, the chief executive of Endeavor, would become the CEO of the newly combined company with WWE”™s Vince McMahon retaining the executive chairman role. Endeavor President Mark Shapiro will also keep his role while WWE CEO Nick Khan will become president of the wrestling business.
“Together, we will be a $21-plus billion live sports and entertainment powerhouse with a collective fanbase of more than a billion people and an exciting growth opportunity,” said McMahon. “The new company will be well positioned to maximize the value of our combined media rights, enhance sponsorship monetization, develop new forms of content and pursue other strategic mergers and acquisitions to further bolster our strong stable of brands. I, along with the current WWE management team, look forward to working closely with Ari and the Endeavor and UFC teams to take the businesses to the next level.”
