Endeavor sells OpenBet. In a management buyout (MBO) on November 11, Endeavour agreed to sell its OpenBet and IMG Arena businesses to OB Global Holdings for about $450 million (£351 million/€423 million).
Several OpenBet executives, including CEO Jordan Levin, are participating in the MBO, which is being supported by Endeavor CEO Ariel Emanuel. A combination of debt and cash will be used to finance it.
When some or all of a company’s management team purchases certain activities and assets from the business’s owner, this is known as a management buyout. It is usually done as a way to take a business private.
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The primary emphasis of the arrangement is OpenBet. During the sign-to-close phase and following closing, Endeavour stated that it will keep marketing IMG Arena for sale to third parties.
More than 200 market operators worldwide, such as FanDuel, PointsBet, ESPN Bet, OPAP, and Sky Bet, are partners of OpenBet. Should the deal go through as planned, Levin will remain the company’s CEO.
The announcement comes after OpenBet made a number of strategic moves, such as landing several agreements with Grupo Silvio Santos (GSS) and BandBet to power betting sites in Brazil.
“This MBO allows us to continue executing our vision for increased market expansion and product innovation,” Levin mentioned. “Our group is extremely confident in OpenBet’s future considering the premium product offering, superior talent and solid foundation we already have in place following a strong period of business growth.”
The agreement is still contingent on a number of standard closing requirements, such as permits from specific gaming regulatory bodies. Endeavor has financial advice from The Raine Group and Oakvale Capital LLP. Endeavor sells OpenBet and IMG Arena.
In August of this year, the double asset sale was originally reported. Endeavour claimed at the time that it was an essential step in finalizing its proposed take-private deal with Silver Lake.
In April, the $13 billion plan to take Endeavor private was agreed upon by technology investment firm Silver Lake. By doing this, Silver Lake will purchase all of the remaining Endeavor shares that it did not previously own.
According to Silver Lake, it will be the biggest investment deal in private equity privatization in more than ten years. In Q1 2025, the Silver Lake takeover is anticipated to conclude.
For $800 million, Endeavor purchased OpenBet in September 2022. However, this was $400 million less than originally negotiated and three months later than anticipated.
The Light & Wonder company, originally known as Scientific Games, underwent a major reorganization that included the selling. In October 2021, it also sold its lottery division to Brookfield Business Partners, a private equity firm, while keeping the Scientific Games name.
Endeavor incorporated IMG Arena into the OpenBet operations in February of this year. In order to maximize its potential, it soon started a strategic evaluation of IMG Arena. As mentioned in the statement, it is unclear what will happen to IMG Arena once the MBO is finished.
After Endeavour released its Q3 financial results last week, the MBO was confirmed. These revealed that revenue for the three months ending September 30th increased by 66.6% year over year to $2.02 billion.
However, all of the income increases was offset by a steep increase in operational expenses. Following tax payments and other expenses, the net loss increased from $117 million to $186.3 million.
But this was only a portion of the narrative. Due to their status as “head for sale,” which indicated that Endeavor was looking for a sale within a year, OpenBet and IMG Arena were both listed as stopped businesses.
The $208.2 million in tax savings only partially offset the $442.4 million net loss from terminated operations. Endeavor sells OpenBet and IMG Arena.
This resulted in a total bottom-line net loss of $264.7 million, as opposed to $69.2 million the previous year, after deducting $155.7 million in net losses from non-controlling interests.
In addition to IMG Arena and OpenBet, Endeavor may sell a number of other businesses.
It began reviewing and possibly selling some of the events in its IMG portfolio last month. These include the art platform Frieze and the tennis competitions the Miami Open and Madrid Open.
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