Hollywood talent agency William Morris Endeavor along with private equity firm Silver Lake Partners are finalizing a deal to acquire IMG Worldwide Inc., the sports and media entity that represents the likes of NFL star Peyton Manning and pop singer Taylor Swift, for more than $2 billion.
The deal, expected to be announced later this week, is a coup for WME and Silver Lake, the Menlo Park, Calif., firm that holds a minority stake in the agency. With IMG in the fold, WME would have access to a trove of new clients and perhaps most importantly an immediate and formidable presence in the sports representation business.
WME will pay private equity firm Forstmann Little about $2.3 billion for New York-based IMG, according to people briefed on the matter who were not authorized to speak publicly. IMG, acquired by Forstmann Little in 2004 for $750 million, was put on the block after the death of leveraged buyout maven Theodore Forstmann in 2011.
IMG has more than 500 athletes, models and entertainers as clients, including Gisele Bundchen, Novak Djokovic and Justin Timberlake. IMG also counts more than 90 universities as clients and represents their media rights -- a hugely lucrative business.
WME, which is based in Beverly Hills and headed by co-Chief Executives Ari Emanuel and Patrick Whitesell, has a client roster that includes Oprah Winfrey, Charlize Theron, Claire Danes and Christian Bale.
Spokespeople for WME, IMG and Forstmann Little all declined comment. Silver Lake did not immediately respond to a request seeking comment.
Also in the bidding was Peter Chernin, the former senior News Corp. and Fox executive whose Chernin Group partnered with private equity firm CVC Capital Partners on an offer. Rival talent agency ICM Partners along with private equity firm Carlyle Group also kicked the tires of IMG. Creative Artists Agency mulled a bid early on in the sale process but bailed out this fall.
For WME, the deal ups its intense competition with CAA for supremacy in the representation business and is further evidence that the battle is moving beyond television and movies and into sports.
CAA has a head start. It represents 800 to 1,000 athletes and also handles corporate naming rights for sports facilities, among other services. It also is a partial owner in Evolution Media Capital, a boutique investment banking firm that specializes in media and sports and has been involved in numerous deals including the sales of the Texas Rangers and Philadelphia 76ers.
WME and Silver Lake were advised on the IMG sale by media executive Mark Shapiro, who could end up with a role in running IMG after the sale closes.
Shapiro, the former chief executive of Dick Clark Productions, has a close relationship with WME's Emanuel. Shapiro was once approached to run IMG by Forstmann after he bought it almost a decade ago. Shapiro is no stranger in the sports world -- he was a senior executive at ESPN for many years. He couldn’t be reached for comment.
Since Silver Lake bought its stake in WME in May 2012, the companies have actively sought to grow their business through acquisitions. This year, WME and Silver Lake made an offer to buy video streaming site Hulu, which ultimately was taken off the market by its owners 21st Century Fox, Walt Disney Co. and Comcast Corp.