First published:2:47AM EST, Last updated:7:46AM EST
Shares of World Wrestling Entertainment (NYSE:WWE), the American professional wrestling promotion company were down in pre-market trading on Monday as it agreed to merge with UFC, to form a new publicly traded company that would be controlled by sports and entertainment company Endeavor (NYSE:EDR). Endeavor will own a 51% stake in the new combined company while WWE shareholders will own the remaining 49%.
This deal values WWE at $9.3 billion and UFC at $12.1 billion. Ari Emanuel, who owns Endeavor will be the CEO of both Endeavor and the new company while Vince McMahon will be the Executive Chairman.
The deal is a strategic fit for Endeavor, which owns the UFC (Ultimate Fighting Championship), a premier mixed martial arts organization. The addition of WWE to its portfolio will make Endeavor a leader in combat entertainment.
The company delivered $5.27 billion in revenues in 2022. Moreover, its business remained resilient to macro headwinds, with UFC recording 21 consecutive sellout events. The acquisition of WWE will bolster its revenue in the Events, Experiences & Rights segment, which increased at a double-digit rate in 2022.
Is Endeavor Group a Good Stock to Buy?
The strong consumer demand for live events and premium experiences will likely support the sales and earnings of Endeavor Group. Deutsche Bank analyst Bryan Kraft sees Endeavor Group benefitting from the growing demand for live events and experiences.
Endeavor Group stock has a Strong Buy consensus rating on TipRanks based on four unanimous Buy recommendations. Moreover, analysts’ price target of $30.75 implies 28.5% upside potential from current levels.
