Endeavor Sets IPO Price, Seeks to Raise $600M

The Hollywood powerhouse's sale of more than 19 million shares priced between $30 to $32 would be the first flotation of a talent agency.
Matthew HellerSeptember 16, 2019

Hollywood powerhouse Endeavor Group has disclosed that it is seeking to raise more than $600 million from the first initial public offering by a talent agency.

The parent of William Morris Endeavor, Hollywood’s largest talent agency, said in an amended prospectus that it will sell 19,354,839 shares priced between $30 and $32. At the top of the range, that would raise $619 million.

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If the offering’s underwriters exercise their option to buy another 2,903,225 shares, the offering proceeds would increase to as much as $712 million.

Endeavor was formed from the merger in 2009 of the William Morris Agency with Endeavor Talent Agency. As The Wrap reports, it “has expanded far beyond its traditional talent agency roots,” acquiring everything from the UFC mixed-martial arts circuit to fashion and sports management group IMG.

“Amidst both industry shifts and our own evolution, access has remained at Endeavor’s core,” the prospectus states. “Once defined by access to talent … we have broadened this access to include” blue-chip brands, IP and owned assets, “reaching diverse audiences across key media verticals globally.”

For the second quarter, the company reported that revenue rose 33% to $1.04 billion. It had net income of $231 million in 2018 after losing money the four previous years.

However, Endeavor’s acquisitions have left it highly leveraged, with long-term debt of $4.6 billion and total liabilities of $7 billion, according to the prospectus. James Gellert, chief executive of analytics firm RapidRatings, noted that the 2018 profit was mostly due to one-time items.

“We see a lot of items that are trending negatively, and the operating-profit line is still bumping along with a negative number,” he told MarketWatch.

Endeavor’s operating loss almost doubled to $107 million last year.

“The good thing is that they have a lot going on, and the bad thing is that they have a lot going on,” said Kathleen Smith, principal at Renaissance Capital.

Endeavor was originally expected to go public this summer but reportedly postponed those plans to finalize its acquisition of On Location Experiences, a hospitality and live-events company.

Photo by Christopher Lee/Getty Images