Technology investor takes minority stake in agency
Technology investor Silver Lake has taken a big bite out of Hollywood, buying a 31% non-controlling stake in WME.Partnership will bring financing into the agency to support clients’ digital endeavors. WME declined to provide specifics on new ventures, but sources say the agency expects to make several strategic investments in the next six to eight months. With offices in New York, San Francisco and international locations, Silver Lake manages about $14 billion in assets, With a main focus on technology and energy sectors, the firm has invested in media companies including Skype and Zynga. Silver Lake has also made a number of investments in association with equity firm TPG, which bought a 35% stake in CAA two years ago. CAA’s deal with TPG was also described as a strategic partnership and included a commitment from both to create a $500 million pledge fund for future investments. In a statement, WME’s managing board said the partnership will “give WME access to Silver Lake’s expertise, resources and relationships across the global technology industry, ensuring our clients and the content they create are strategically positioned for the future as the convergence of technology, entertainment and media accelerates.” Silver Lake managing partner Egon Durban will join WME’s executive committee along with the company’s co-CEOs. Durban will also help create a new Technology Advisory Council that will identify technology-related growth opportunities that would benefit WME’s clients. WME’s management board will continue to oversee day-to-day operations. Co-CEOs Ari Emanuel and Patrick Whitesell and rest of the management team have renewed their contracts with the agency. Though WME was not lacking funds, the deal underscores that major tenpercenteries are looking to outside investors to pursue business development initiatives. ICM struck a deal with equity firm Rizvi Traverse in 2005 that is now unwinding as the agency shifts to a partner-owned structure. WME was advised in the transaction with Silver Lake by the Raine Group and Paul, Weiss, Rifkind, Wharton and Garrison LLP. Silver Lake was advised by Simpson Thacher & Bartlett LLP.
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