Endeavor Group Transfers Key Assets to TKO

In a strategic move to bolster its position in the premium sports market, TKO Group Holdings, Inc. (NYSE: TKO) has reached a definitive agreement with Endeavor Group Holdings, Inc. (NYSE: EDR) to acquire Professional Bull Riders (PBR), On Location, and IMG in an all-equity transaction valued at $3.25 billion. This acquisition, set to close in the first half of 2025, will complement TKO's existing core UFC and WWE businesses and expand its operational footprint in the fast-growing premium sports market.

PBR, On Location, and IMG are industry-leading assets that will meaningfully enhance TKO's portfolio and strengthen its position in premium sports globally. PBR, the world's premier bull riding league, organizes more than 200 annual live events, welcoming approximately 1.25 million fans, and reaching more than 285 million households in more than 65 territories. On Location, a leading provider of premium experiences for fans attending more than 1,200 sporting events, will further diversify TKO's revenue streams. IMG, one of the world's largest global distributors and producers of sports content, will enable TKO to capture more upside from partner leagues and events in the sports ecosystem.

The acquisition comes after Endeavor explored its strategic alternatives, as executives believed its stock price was not reflecting the company's value. In April, Endeavor said it will be taken private through private equity firm Silver Lake, its largest investor. The acquisition of PBR, On Location, and IMG by TKO is a significant step in reconfiguring Ari Emanuel's sports and entertainment empire.

TKO, which combines mixed martial arts league UFC and pro-wrestling giant WWE, became a publicly traded company in September 2023, with Endeavor having a 51% controlling stake. After the new deal, Endeavor will increase its ownership of TKO to 59%. Endeavor will receive approximately 26.14 million common units of TKO Operating Company, LLC and will subscribe for an equal number of shares of TKO's Class B common stock.

TKO stock declined 8% to $115.42 a share on Thursday morning, while Endeavor's stock dropped 0.8% to $28.95 a share. Despite the initial market reaction, the acquisition is expected to create synergies and enhance TKO's growth prospects in the premium sports market. The integration of PBR, On Location, and IMG will help power the growth of TKO's revenue streams and position it to capture even more upside from some of the most attractive parts of its sports ecosystem.