TKO Group (TKO) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of PBR, On Location, and IMG expands leadership and operational footprint in premium global sports, complementing existing businesses and enhancing value creation in fast-growing markets.

• The deal enables direct participation in growth from partner leagues and events, leveraging synergies across media rights, live events, sponsorship, and brand partnerships.

• These assets are well-established, offer significant growth potential, and position the company for accelerated growth in attractive industry segments.

• Recent investments, such as a customer data platform for On Location, are expected to drive profitable growth across the portfolio.

• Aligns with premium leagues and properties, leveraging strategic partnerships for profitable growth.

Financial terms and conditions

• All-equity transaction valued at $3.25 billion, based on the 25-day VWAP of TKO's Class A common stock ending October 23, 2024.

• Endeavor will receive about 26.14 million common units of TKO Operating Company, LLC and an equal number of TKO Class B shares, resulting in Endeavor owning approximately 59% of TKO post-transaction.

• The deal is expected to close in the first half of 2025, subject to customary closing conditions, regulatory approvals, and purchase price adjustments settled in cash and equity.

• The purchase price implies a multiple of approximately 12x combined run rate Adjusted EBITDA, inclusive of synergies.

• Pro forma, non-Endeavor shareholders will own about 41% of TKO.

Synergies and expected cost savings

• Targeting over $30 million in annualized run rate savings, mainly from eliminating service fees and operational efficiencies.

• Some savings will be offset by incremental costs to replicate Endeavor's support services.