Russian investors paid $ 9.7 million for a stake in a joint business with the organizer of the UFC mixed martial arts tournaments. This is stated in the prospectus for the IPO of the American Endeavor Group, which owns the UFC.
The establishment of a joint venture for the development of the mixed martial arts (MMA) industry in Russia and the CIS was announced by the Russian-Chinese Investment Fund (RCIF, created by the Russian Direct Investment Fund and China Investment Corporation), Mubadala Investment Company (UAE) and the UFC announced on July 18, 2018. At the exchange rate of the Central Bank on the date of the announcement of the deal, the contribution of Russian investors to the joint venture amounted to about 605.6 million rubles.
How the partners’ shares in the Russian business are distributed is not stated in the Endeavor prospectus, but it is noted that the share is not a controlling one. The representative of the RDIF did not disclose these data either.
Under the terms of the deal with Endeavor, the Russian partners received a put option: they will be able to sell their stakes in the company 5.5 years after the money was deposited into the joint venture. The buyback price will be determined as the higher of the two: either at fair market value, or as the amount of funds invested (investments by Russian investors minus funds that were distributed by the company to shareholders). At both the end of 2018 and March 31, 2019, Endeavor estimated this amount at $ 9.7 million.
The joint venture between the Russians and the UFC will prepare and conduct sports events under its brand in Russia and the CIS, as well as popularize mixed martial arts, organize broadcasts, attract sponsors, produce licensed products, sell broadcast rights, a representative of the RDIF told Vedomosti in the summer of 2018 …
The Endeavor Group announced its intention to hold an IPO on May 23, 2019. In addition to the UFC tournaments, the group holds the Miss Universe and Miss USA contests – it bought their organizer in 2015 from the structures of Donald Trump, the current president of the United States. Earlier, Endeavor Group bought the sports and modeling agency IMG Worldwide for $ 2.4 billion. The group is also engaged in agency activities, it has more than 150 clients, including Rihanna, Charlize Theron, and others.
But more than 70% of the group’s revenue comes from content (from TV shows to series and video games) and royalties from it, the Financial Times (FT) notes. As stated in the Endeavor prospectus, the group has funded and / or sold over 100 shows and films, including Night Administrator, La La Land, Killing Eve, and others. Group revenue for 2018 – $ 3.6 billion
The Endeavor Group did not disclose how much it expects to raise from the IPO. To calculate the commission for the transaction, the placement amount is indicated at $ 100 million.In 2017, Endeavor was estimated by investors at the last transaction at $ 6.3 billion. The funds from the transaction will go to general corporate purposes, part of the funds may go to debt payments and the purchase of other assets, she noted. FT.
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