Endeavor Group Holdings disclosed a strategy this week to divest its sports betting divisions as part of a previously-announced plan this spring to be acquired by a private equity giant.
The strategic plan comes months after Endeavor entered into a definitive agreement in April to be acquired by Silver Lake, a prominent global technology investment firm. Endeavor indicated Thursday that it began to actively market the divisions, OpenBet and IMG Arena, during the second quarter of 2024. The businesses, which comprise Endeavor’s sports data and technology segment, are presently characterized as "held for sale” Endeavor announced in a second-quarter earnings release. While Endeavor presented the businesses as "discontinued operations” in the company’s consolidated interim financial statements, the segments will continue "operating as usual” according to the company.
Under April’s $13 billion take-private agreement, Silver Lake will acquire 100% of the outstanding shares it does not already own, other than rolled interests, according to a press release on the deal. At the time, Endeavor disclosed its intent to transfer, divest, or sell certain business units or assets of the company. Endeavor earmarked a large portion of assets for a potential sale, excluding those within TKO Group Holdings and the agency representation business WME, the company announced on Thursday.
A Proper Multiple?
Endeavor entered into an agreement in Sept. 2021 to purchase OpenBet from Scientific Games in a $1.2 billion cash-and-stock deal. Upon the purchase, Endeavor CEO Ari Emanuel unleashed an ambitious plan to create a suite of "end-to-end solutions” for sportsbooks, leagues, and federations worldwide.
Endeavor, which already owned IMG Arena, aimed to create a sports betting powerhouse through the sports data and technology unit. In a presentation outlining the transaction, Endeavor projected 2022 pro-forma revenues of $340 million. The transaction implied a revenue multiple of approximately 8x, according to the company.
In conjunction with the 2021 transaction, Endeavor CEO Ari Emanuel described OpenBet as a strategic addition to the company’s growing sports betting portfolio. OpenBet also offers player account management solutions and pricing feeds through Don Best, a sports betting data provider acquired by Scientific Games in 2018. The 2021 agreement enabled Endeavor to fill its war chest as the company embarked on a plan to round out its technological offerings for sportsbook operators.
https://sportshandle.com/endeavor-to-put-openbet-up-for-sale/