Tseung Kwan O GroupThe company that owns WWE and UFC is expanding into sports peripherals by acquiring three businesses from its controlling owners for $3.25 billion. Endeavor Group.
Announced on Thursday, the three companies are Professional Bull Riders, On Location and IMG. The deal is all stock and Endeavor’s stake in TKO will increase from 53% to 59%.
The deal expands TKO’s strategic ambitions by extending its sports focus beyond league operations. While the company did acquire a new league in PBR, the world’s largest bull riding league, it has also expanded into the luxury hospitality industry through IMG through On Location and media rights consulting businesses.
“Sports unites us, and the need for sports has never been greater,” Mark Shapiro, president and chief operating officer of Endeavor and TKO, said in an interview. “At TKO, our primary interest is in league ownership if if that exists) and businesses that can power our current sports ecosystem. That could be ticket sales, hospitality, consumer products, media rights expertise. That’s what we’re getting in IMG and on location.
Private equity firm Silver Lake announced its intention Endeavor was taken private earlier this year. Shapiro said Silver Lake hopes to divest certain assets as part of the deal. Endeavor proposed the sale of the three businesses to TKO’s board of directors. Shapiro said TKO formed a special committee to review the deal and ultimately recommended it to the board of directors.
PBR hosts more than 200 events each year for more than 1 million fans. TKO said in a statement that PBR CEO and Commissioner Sean Gleason will continue to lead the organization.
On Location provides luxury hospitality for major sporting events such as the Super Bowl, Ryder Cup, March Madness, FIFA World Cup and Olympics.
IMG packages and sells media rights and brand partnerships, providing strategic advice on the largest television deals in the NFL, Premier League, National Hockey League, Major League Soccer, UFC, WWE and PBR. According to a TKO statement, the acquisition of IMG does not include “business related to the IMG brand in licensing, modeling and tennis representation, nor does it include IMG’s complete event portfolio.”
In addition to this transaction, TKO also announced that it will initiate an annual dividend of $300 million and has authorized a stock repurchase program of up to $2 billion of its Class A common stock.
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