WME-IMG is about to receive a $1.1 billion investment led by a Canadian pension fund and a Singaporean sovereign wealth fund, Variety has learned.
The investment round values the agency at $6.3 billion, an increase from its $5.5 billion valuation in 2016. Silver Lake Partners, the private equity firm that owns a major stake of WME-IMG, announced the deal Tuesday in a letter to its investors. The deal was arranged by WME-IMG and Silver Lake, and is expected to close in mid-August.
In the letter, Silver Lake said the new investment will make it possible to buy out some minority partners in the Ultimate Fighting Championship and to allow some of WME-IMG’s senior management and investors to take cash out. The investment is also intended to enable further acquisitions.
Silver Lake and WME-IMG declined to comment. The Canada Pension Plan Investment Board and Government of Singapore Investment Fund are limited partners of Silver Lake. Other limited partners are also expected to take part.
The capital infusion could also relieve pressure on WME-IMG to do a public offering. The investment gives investors in Silver Lake’s funds and WME-IMG senior execs the option to liquidate their stakes now, potentially postponing a long-rumored IPO.
Silver Lake has invested $750 million in WME-IMG in two rounds, first into WME in 2012, and again in 2014 upon the merger with IMG, giving it a majority stake in the combined company. With subsequent investments, Silver Lake now holds a sizable minority of the firm. Softbank invested $250 million in 2016 at the $5.5 billion valuation. The new round does not alter Silver Lake’s investment in the company.
The note stated that the latest investment will give Silver Lake’s investors a greater stake in the long-term upside at WME-IMG, which is led by co-CEOs Ari Emanuel and Patrick Whitesell. They spearheaded the $4 billion acquisition of UFC last year.
“Silver Lake’s long-term thesis based on the increasing value of premium/live content accelerated by tech/media convergence continues to fuel growth for WME-IMG,” the note states. “We believe WME-IMG is a unique platform across media, entertainment and sports with significant growth opportunities and remain optimistic about continued near and long-term equity value creation at the company.”
Silver Lake reassured investors that the valuation was approved by the Limited Partner Advisory Committees of two Silver Lake funds, Silver Lake III and Silver Lake IV. That approval is intended to address a potential conflict of interest arising from the transaction between investors of the two funds.