WME-IMG secures $1.1bn in fresh investment
WME-IMG, the combined Hollywood talent agency and sport and entertainment company, has benefited from a $1.1-billion injection led by investors in Canada and Singapore.
Canada Pension Plan Investment Board (CPPIB) and the Government of Singapore Investment Fund (GIC) are contributing as limited partners of private equity firm Silver Lake Partners. Silver Lake joined WME in the $2.4-billion takeover of IMG at the end of 2013, and is maintaining its stake in the company.
CPPIB said its investment amounts to $400 million, representing an 8-per-cent minority interest in the company.
The new partnerships, which were first reported by Variety magazine, were presented in a letter from Silver Lake to its investors and confirmed by WME-IMG on Wednesday. It is expected to close in mid-August, with other limited partners likely to take part.
The new funding round values WME-IMG, which is headed up by co-chief executives Ari Emanuel and Patrick Whitesell, at $6.3 billion, up from $5.5 billion last year.
The letter said the new investment will make it possible to buy out some minority partners in UFC, the popular mixed martial arts series, which WME-IMG bought for $4 billion in July of last year, and will also enable senior management and investors to take cash out, while paving the way for further acquisitions.
It also stated that the new injection will give Silver Lake investors a greater stake in the long-term upside at WME-IMG.
The note reads: “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. 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.”
In a joint statement confirming the investment, Emanuel and Whitesell said: "We're thrilled to welcome CPPIB and GIC - two leading global investors - to the WME | IMG family as our newest strategic partners. We look forward to working with them to continue growing our international footprint and delivering valuable new opportunities to all our clients and partners."
Ryan Selwood, managing director, head of direct private equity, private investments, at CPPIB, said of its involvement: "This investment in a unique market leading platform in entertainment, sports and media further diversifies our portfolio. WME | IMG's broadly diversified group of global businesses, and management team with a proven track record of building shareholder value position the company well for growth, particularly in content production and distribution. We are pleased to have another opportunity to invest alongside Silver Lake, a longstanding partner, and WME | IMG's management to support future growth of the business."
Eric Wilmes, managing director of private equity at GIC, added: "GIC is committed to supporting WME | IMG's continuing innovation, industry leadership and international expansion. WME | IMG has demonstrated a capacity to grow and diversify in an increasingly complex environment for sports, entertainment and fashion globally. As a long-term investor, GIC believes the company will benefit from the strong trend of consumers demanding quality content."
It is thought that the new injection of funding could relieve pressure on a long-mooted initial public offering of WME-IMG, given that it offers senior executives and investors the option to liquidate their stakes at this point.
Silver Lake invested $750 million in the business in rounds in 2012 and 2014, the latter upon the completion of the merger of WME and IMG, and other investors include SoftBank Group, the Japanese telecoms firm, which put in $250 million in 2016, and Fidelity Management and Research Co., a US mutual fund company, which contributed $55 million last year.