Forstmann Little & Co. cut the field of bidders for its IMG Worldwide Inc. talent agency to five, knocking out a joint bid from TPG Capital and Creative Artists Agency, said people with knowledge of the matter.
Silver Lake Management LLC, KKR & Co., CVC Capital Partners Ltd. and Carlyle Group LP (CG) are still vying with each other for the business, which may fetch more than $2.5 billion, the people said, asking not to be identified because the information is private. New York-based Forstmann Little cut the list from 12 bidders after a Nov. 7 deadline, the people said.
The departure of TPG and Creative Artists, which had been seen as among the front-runners, pits Silver Lake and its partner, William Morris Endeavor Entertainment LLC, against CVC, owner of the Formula One car-racing series. IMG represents National Football League quarterback Peyton Manning and singer Taylor Swift, and also manages fashion and sports events.
Spokesmen for TPG, KKR, CVC, Silver Lake and Forstmann Little all declined to comment, while a spokesman for Washington-based Carlyle wasn’t available to comment.
IMG’s college sports team licensing business is one of the company’s more attractive assets, one of the people said. At the same time, money-losing joint ventures in India, China, Turkey and Brazil are weighing down bid prices, two people said.
Forstmann Little has told bidders that the company has $200 million a year in earnings before interest, taxes, depreciation and amortization, or Ebitda. The overseas operations have adjustments that lower Ebitda to $181 million, two people said.
Forstmann Little hopes to have a deal done by the end of the year, one of the people said. The firm hired Morgan Stanley and Evercore Partners Inc. (EVR) in May as advisers for a possible sale, people with knowledge of the matter said at the time. In August, the buyout firm announced it was considering a range of options for the agency. It acquired IMG in 2004 for about $750 million, according to a person familiar with the matter.
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