Endeavor Group Holdings, owners of the UFC, are looking to blaze a new trail as a major global entertainment company—when they enter the stock market as a publicly traded company. The massive conglomerate that includes the William Morris Agency and the International Management Group (IMG) had planned to hit the stock market over the summer, but delayed that move to finalize acquisition of another piece of its expanding media empire—On Location Experiences, a company that creates VIP packages for major sporting and entertainment events.
Now, the LA Times reports that, in a filing with the U.S. Securities and Exchange Commission, plans to move ahead with their IPO this fall—at an estimated share price of $30-32 for an expected 19,354,839 shares. That puts their total planned earnings for the IPO somewhere between $600-620 million.
Of that, Variety reports that Endeavor will put $500 million toward paying down their massive debt load (said to be as much as 9.5x their earnings before interest, taxes, depreciation and amortization). An additional $46.8 million of their IPO earnings will apparently be used to as general business funds.
At the time the IPO was initially announced, experts warned of caution. Analyst Todd Juenger of the Bernstein Research Group noted that “shareholder will need to be willing to accept an extraordinary high amount of debt and very tight interest coverage.” Adding that Endeavor has a “questionable ability to de-lever organically, depending on one’s confidence in revenue growth and operating leverage.”
The end result is a major business gamble that the UFC has seemingly no control over, but which could have far reaching potential impacts on the future of the world’s largest MMA organization.