S&P places Endeavor Group on watch

S&P said it placed its BB- rating on Endeavor Group Holdings Inc. and its subsidiaries, including WME IMG Holdings LLC and UFC Holdings LLC, on CreditWatch with negative implications.

On Tuesday, Endeavor announced agreed with Silver Lake which will acquire 100% of the outstanding shares it does not already own, other than rolled equity interests, for $27.50 a share. Silver Lake will use equity and new debt to finance the deal.

“We expect Silver Lake's take-private transaction will likely increase adjusted leverage above our 5.5x threshold for the current BB- ratings,” the agency said in a press release.

S&P said it expects to resolve the negative watch once Endeavor discloses a firm capital structure, which will probably be in the fourth quarter of 2024. “In resolving the CreditWatch, we will assess Endeavor's adjusted leverage over the next 24 months. We could lower our issuer credit rating if we expect adjusted leverage will remain above 5.5x on a sustained basis.”

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