Friday, September 27, 2019

Endeavor Group postpones planned IPO | Music Business Worldwide

Endeavor Group Holdings, the parent company of Los Angeles-based talent agency WME, postponed its IPO yesterday (September 26) – the day before its scheduled New York Stock Exchange debut.

The entertainment giant made the last minute decision ‘due to weak stock market demand’, according to a report by CNBC.

The postponement follows the recent cancellation of WeWork’s IPO, as well as Peloton’s weaker than hoped for market debut yesterday.

Endeavor issued a statement late yesterday stating that it “will continue to evaluate the timing for the proposed offering as market conditions develop”.

It was expected to start trading today (September 27) under the ticker EDR.

As reported by Variety a couple of weeks ago, Endeavour was originally hoping to raise up to $620 million based on the sale of 19.4m shares priced at between $30 and $32 per share, with an expected market cap of almost $8 billion.

Endeavour lowered those expectations in its amended S-1 registration statement filed with the SEC yesterday, with its proposed share price revised to a ‘highpoint’ of $27.

“Endeavor will continue to evaluate the timing for the proposed offering as market conditions develop.”

Said the statement: “Based on an assumed initial public offering price of $27.00 per share (the highpoint of the estimated public offering price range set forth on the cover page of this prospectus), we estimate that the net proceeds from this offering will be $361.6 million (or $419.3 million if the underwriters exercise their option to purchase additional shares in full), after deducting underwriting discounts and commissions and estimated offering expenses payable by us”.

Citing a source, Reuters reports that Endeavor’s IPO will be revisited in 2020 ‘if market conditions improve’.

In the S-1 document, Endeavor describes itself a “global entertainment, sports and content company, home to many of the world’s most dynamic and engaging storytellers, brands, live events and experiences”.

In addition, writing in a letter within the S-1, Endeavor CEO Ari Emmanuel said: “Content is no longer defined solely by the traditional categories our businesses were founded on. Television, movies and live events have been joined by others including podcasts, experiences, social media and multiplayer video games.

“Wherever you are in the world and whatever way you define content, Endeavor is likely playing a role.”

Endeavour’s recent history is as follows: In 2009 the William Morris Agency (which was formed in 1898) became William Morris Endeavor Entertainment (WME) via a merger with Endeavor, engineered by WME Co-CEOs Ari Emanuel and Patrick Whitesell.

The company (alongside private equity firm Silver Lake Partners) bought sports and fashion talent management agency IMG in 2014 for $2.3 billion, with the talent booking giant WME-IMG subsequently making a number of further acquisitions such as Miss Universe and Ultimate Fighting Championship (bought for $4bn).

In 2017, WME-IMG rebranded as Endeavor.

WME agents are behind global tours for some of the world’s biggest artists, from country stars like Jason Aldean and Miranda Lambert to Drake.Music Business Worldwide


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