Silver Lake Said Near $2.3 Billion Purchase of IMG Agency

Silver Lake Management LLC, a backer of William Morris Endeavor Entertainment LLC, has agreed to the terms of an acquisition of talent agency IMG Worldwide Inc. from Forstmann Little & Co. for more than $2.3 billion, two people with direct knowledge of the matter said.

Silver Lake and William Morris still have to sign the terms of the agreement, the people said, asking not to be identified as the information is private. The companies intend to announce the sale tomorrow, the people said.

The combination of IMG and William Morris would create an agency with top talent cutting across both sports and entertainment. William Morris represents some of Hollywood’s biggest actors, directors and writers, including Matt Damon and Ben Affleck. Adding IMG’s stable of athletes and models, including Peyton Manning and Gisele Bundchen, will create television and digital opportunities for William Morris, said former Madison Square Garden President Bob Gutkowski.

“There are certainly content opportunities for William Morris,” said Gutkowski, who is now a partner in Lake Success, New York-based Innovative Sports & Entertainment, which advises private equity in sports, entertainment and media company investments. “There are opportunities to build a television arm of IMG.”

IMG also manages fashion and sports events such as Mercedes-Benz Fashion Week and Wimbledon. Founded in 1960, IMG has 3,500 employees globally, according to its website.

Robust Auction

The auction for IMG had pit Silver Lake and William Morris against CVC Capital Partners Ltd., owner of the Formula One car-racing series, people with knowledge of the matter have said. Carlyle Group (CG) LP was also among bidders earlier this month, the people said.

Spokesmen for Forstmann Little, Silver Lake and CVC declined to comment. The Wall Street Journal earlier today reported that William Morris was near an agreement for IMG.

William Morris Endeavor was created when Ari Emanuel’s Endeavor acquired William Morris in 2009. The Beverly Hills, California-based company is also a leading representative of authors and recording artists. In 2012, Silver Lake acquired a 31 percent stake in William Morris Endeavor.

Forstmann Little had sought as much as $2.5 billion for IMG, people said earlier this month.

Earnings Questioned

At the start of the auction the buyout firm told bidders that IMG would earn $200 million in earnings before interest, taxes, depreciation and amortization this year, people familiar with the situation said. Bidders questioned that figure because of some accounting changes and one-time adjustments, the people familiar with the earnings dispute said.

Forstmann Little hired Morgan Stanley (MS) and Evercore Partners Inc. in May as advisers for a possible sale, people with knowledge of the matter said at the time. In August, the buyout firm said 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.

To contact the reporters on this story: Scott Soshnick in New York at ssoshnick@bloomberg.net; David Welch in New York at dwelch12@bloomberg.net

To contact the editors responsible for this story: Michael Sillup at msillup@bloomberg.net; Mohammed Hadi at mhadi1@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.