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Vince McMahon’s World Wrestling Entertainment (NYSE:WWE) confirmed it has agreed on the sale to Endeavor Group (NYSE:EDR). Several media outlets previously reported the two sides are in advanced talks over a sale.
The deal sees WWE merge with EDR’s UFC. Under the terms of the agreement discussed, a new publicly-traded company would be formed with EDR owning 51% while WWE getting 49%.
“This is a rare opportunity to create a global live sports and entertainment pureplay built for where the industry is headed,” said Ariel Emanuel, CEO of Endeavor.
Emanuel will be the CEO of the new company while McMahon will take the executive chairman role.
“Given the incredible work that Ari and Endeavor have done to grow the UFC brand – nearly doubling its revenue over the past seven years – and the immense success we’ve already had in partnering with their team on a number of ventures, I believe that this is without a doubt the best outcome for our shareholders and other stakeholders,” said Vincent K. McMahon, executive chairman of WWE.
The deal gives WWE an enterprise value of $9.3 billion. Shares closed at $91.26 on Friday, giving the wrestling promotion company a market value of $6.79B.
The new company is expected to deliver $50 million-$100 million in annualized run-rate cost synergies.
Wells Fargo analysts said the deal implies a $102/share valuation for WWE. The analysts believe the EDR deal should be seen “favorably for WWE.”
“We do not expect another bidder for WWE as EDR seems like the most logical partner given its acquisitive nature and similar/complimentary assets, incl. strong knowledge of the Media market for selling content rights and managing talent. The premium is solid, and if McMahon is on board then it’s done as WWE is a controlled company (and McMahon would need a hefty premium for a cash deal),” they said in a client note.
