| Item 7.01 | Regulation FD Disclosure. |
On April 25, 2023, Endeavor Group Holdings, Inc., a Delaware corporation (the “Company” or “Endeavor”), issued a press release announcing the Transaction (as defined below), involving the sale of IMG Academy (as defined below) for an enterprise value of $1.25 billion. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information contained under Item 7.01 of this Current Report on Form 8-K (including Exhibit 99.1), shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as may be expressly set forth by specific reference in such filing.
On April 25, 2023, IMG Worldwide, LLC, a Delaware limited liability company (the “Seller”) and subsidiary of the Company, and IMG Academy Parent, LLC, a Delaware limited liability company (“IMG Academy”) and direct controlled subsidiary of Seller, entered into a Purchase Agreement (the “Purchase Agreement”), by and among Seller, IMG Academy, and Acorn Holdco, Inc., a Delaware corporation (“Purchaser”). Pursuant to the Purchase Agreement, among other things, and subject to the satisfaction or waiver of the conditions set forth therein, Seller will sell, assign and transfer to Purchaser, and Purchaser will purchase, acquire and accept from Seller all of the issued and outstanding Class A Units of IMG Academy in exchange for estimated aggregate cash proceeds equal to approximately $1.1 billion (subject to certain adjustments) (the “Purchase Price” and collectively, the “Transaction”).
The consummation of the Transaction is expected to close in the third quarter of 2023, subject to the satisfaction or waiver of certain customary conditions, including, among others, (i) the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“Regulatory Approval”), (ii) the absence of any order or legal requirement that enjoins, restrains or otherwise prevents the consummation of the Transaction, (iii) the consummation of an internal reorganization to be effected by IMG Academy and Seller in advance of consummating the Transaction, pursuant to which Seller will transfer certain assets held by Seller relating to IMG Academy’s business to IMG Academy and its affiliates and (iv) customary conditions regarding the accuracy of the representations and warranties and material compliance by the parties with their respective obligations under the Purchase Agreement. Under the terms of the Purchase Agreement, consummation of the Transaction cannot occur prior to July 23, 2023. Pursuant to equity commitment letters, BPEA Private Equity Fund VIII, SCSp and BPEA Private Equity Fund VIII, L.P., have committed to provide Purchaser an aggregate equity contribution in an amount that is sufficient to fund the payment of the Purchase Price in accordance with the Purchase Agreement at the closing.
The Purchase Agreement also contemplates that (i) Seller and Purchaser will enter into a transition services agreement as of closing, pursuant to which Seller will agree to provide a limited set of services to Purchaser following the closing of the Transaction and (ii) Seller and IMG Academy will enter into a trademark license agreement as of closing, pursuant to which Seller will agree to license certain trademarks to IMG Academy following the closing of the Transaction. The Purchase Agreement also includes a limited non-compete for a period of 5 years following the closing and limited non-solicit for a period of 3 years following the closing.
The Purchase Agreement includes customary termination provisions for both Seller and Purchaser, whereby the parties may terminate (i) by mutual written consent, (ii) following a permanent legal prohibition on consummating the Transaction, (iii) if the closing of the Transaction has not occurred within 180 days of the date of the Purchase Agreement, and (iv) following a breach by the other party of its representations and warranties or covenants contained in the Purchase Agreement that would result in a failure of a condition to closing of the Transaction, subject to cure rights.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that do not relate to matters of historical fact should be considered forward-looking statements, including the Company’s expected closing of the Transaction and the timing thereof. In some cases, you can identify forward-looking statements by terms such as “aim,” “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate,” “target,” “mission,” “will,” “potential” or, in each case, their negative, or other variations or comparable terminology and expressions. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from what is expressed or implied by the forward-looking statements, including, but not limited to: Endeavor faces uncertainties
