| Item 1.01. | Entry into a Material Definitive Agreement. |
On November 9, 2023, TKO Group Holdings, Inc. (“TKO” or the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with TKO Operating Company (“TKO OpCo”), Morgan Stanley & Co. LLC, as representative of the various underwriters (collectively, the “Underwriters”), and Mr. Vincent K. McMahon (the “Selling Stockholder”), in connection with the underwritten secondary offering by the Selling Stockholder of 8,400,000 shares of the Company’s Class A common stock, par value $0.00001 per share (the “Class A Common Stock”), at an offering price of $79.80 per share (the “Secondary Offering”). The Secondary Offering closed on November 14, 2023. The Company did not offer any shares of Class A Common Stock in the Secondary Offering and did not receive any proceeds from the sale of shares of Common Stock in the Secondary Offering.
The Secondary Offering was made pursuant to a prospectus supplement, dated November 9, 2023, to the prospectus, dated September 19, 2023, which was included in the Company’s shelf registration statement on Form S-1 (File No. 333-274541) filed with the Securities and Exchange Commission (the “Commission”) on September 15, 2023, and which became effective on September 19, 2023.
Pursuant to the Underwriting Agreement, TKO agreed to purchase 1,308,729 shares of its Class A Common Stock from the Underwriters, at a price per share equal to the price being paid by the Underwriters to the Selling Stockholder, resulting in an aggregate purchase price of approximately $100.00 million (the “Share Repurchase”). TKO funded the Share Repurchase with approximately $100.0 million of borrowings under the revolving credit facility under the First Lien Credit Agreement dated as of August 18, 2016 by and among Zuffa Guarantor, LLC, UFC Holdings, LLC, the lenders party thereto from time to time and Goldman Sachs Bank USA, as Administrative Agent. In connection with the Secondary Offering, Ariel Emanuel, TKO’s Chief Executive Officer and director, Mark Shapiro, TKO’s President, Chief Operating Officer and director, and certain other of TKO’s directors agreed to purchase 12,531 shares, 12,531 shares and 10,650 shares, respectively, of TKO’s Class A Common Stock in the Secondary Offering at the public offering price.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, TKO OpCo, the Selling Stockholder and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, other obligations of the parties and termination provisions. The foregoing description of the Underwriting Agreement is not complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement, a copy of which is filed as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Cautionary Statement Regarding 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. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements in this Current Report on Form 8-K that do not relate to matters of historical fact should be considered forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements use these words or 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, those important factors discussed in Part II, Item 1A “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, as any such factors may be updated from time to time in the Company’s other filings with the SEC, including the prospectus supplement on Form 424(b)(5) filed in connection with the Secondary Offering, each accessible on the SEC’s website at www.sec.gov and the Company’s investor relations site at investor.tkogrp.com. Forward-looking statements speak only as of the date they are made and, except as may be required under applicable law, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
