UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading |
Name of each exchange on which registered | ||
| Class A Common Stock, $0.00001 par value per share |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 | Entry into a Material Definitive Agreement. |
On June 30, 2022, Endeavor Group Holdings, Inc., a Delaware corporation (the “Company” or “Endeavor”), Endeavor Operating Company, LLC, a Delaware limited liability company and subsidiary of the Company (“Buyer”), and Light & Wonder, Inc. (formerly known as Scientific Games Corporation), a Nevada corporation (“Parent”), entered into an amendment (the “Amendment”) to that certain Equity Purchase Agreement, dated as of September 27, 2021 (the “Original Equity Purchase Agreement”, and as amended by the Amendment, the “Equity Purchase Agreement”) by and among the Company, Buyer, and Parent. Pursuant to the Original Equity Purchase Agreement, among other things, and subject to the satisfaction or waiver of the conditions set forth therein, certain subsidiaries of Parent (such subsidiaries, the “Sellers”) agreed sell to Buyer, and Buyer agreed to purchase from the Sellers, all of the Sellers’ right, title and interest in and to the outstanding equity interests of certain entities (such transaction, the “Acquisition”), which collectively, are engaged in the business of providing products and services to sports betting operators for the purposes of sport wagering (the “Business” or “OpenBet”) in exchange for consideration having an aggregate value of $1.2 billion, subject to certain adjustments set forth in the Original Equity Purchase Agreement (the “Original Purchase Price”). The Original Purchase Price consisted of $1.0 billion of cash and 7,605,199 newly-issued shares of the Company’s Class A common stock, par value $0.00001 per share (the “Class A Common Stock”), with a market value of $200 million based on the volume-weighted average trading price of the Class A Common Stock for the twenty (20) trading days ending on September 24, 2021. Capitalized terms not otherwise defined herein have the meaning set forth in the Equity Purchase Agreement.
Pursuant to the terms of, and subject to the conditions specified in, the Amendment, which has been approved by the Executive Committee as the governing body of the Company, which is the manager of Endeavor Manager, LLC, which in turn is the manager of Buyer, upon consummation of the Acquisition, Buyer, instead of providing to Parent the Original Purchase Price, will provide to Parent consideration having an aggregate value of $800 million, subject to certain adjustments set forth in the Equity Purchase Agreement (the “New Purchase Price”). The New Purchase Price will consist of $750 million of cash, expected to be funded with cash on hand and 2,305,794 newly-issued shares of the Class A Common Stock, with a market value of $50 million based on the volume-weighted average trading price of the Class A Common Stock for the twenty (20) trading days ending on June 29, 2022. The Outside Date of the Original Equity Purchase Agreement also will be extended to September 27, 2022 and, if certain conditions to closing are not met by that date, December 30, 2022.
The foregoing summary of the material terms of the Amendment is not complete and is qualified in its entirety by reference to the Amendment, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference, and the Original Equity Purchase Agreement, a copy of which is attached as Exhibit 2.1 to the Company’s Form 8-K, filed with the SEC on September 28, 2021, and incorporated herein by reference.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that do not relate to matters of historical fact should be considered forward-looking statements, including the Company’s expected closing of the Acquisition and the timing thereof, the issuance of the Class A Common Stock, the expected source of funding for the Acquisition and the anticipated creation of a new reporting segment. In some cases, you can identify forward-looking statements by terms such as “aim,” “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate,” “target,” “mission,” “will,” “potential” or, in each case, their negative, or other variations or comparable terminology and expressions. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees and involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from what is expressed or implied by the forward-looking statements, including, but not limited to: Endeavor faces uncertainties regarding the consummation of the Acquisition, including that certain conditions to the consummation of the Acquisition will not be satisfied; Endeavor may experience difficulties integrating the Business and in realizing the expected benefits of the Acquisition; Endeavor may need to use resources that are needed in other parts of its business to do so; the Business may have liabilities that are not known, probable or estimable at this time; the Acquisition may result in the diversion of Endeavor’s management’s time and attention to issues relating to the Acquisition and integration; Endeavor may not achieve expected synergies and operating efficiencies attributable to the Acquisition within its expected time-frames or at all; Endeavor may incur significant transaction costs and integration costs in connection with the Acquisition; Endeavor may face challenges protecting and preserving the acquired intellectual property rights; risks inherent to the Business may result in additional strategic and operational risks to Endeavor, which may impact Endeavor’s risk profile and which Endeavor may not be able to mitigate effectively; and the Business operates in a changing regulatory environment and may be forced to restrict or cease operations entirely in certain jurisdictions due to changes in law or regulations. In addition, a number of important factors could cause Endeavor’s actual future results and other future circumstances to
differ materially from those expressed in any forward-looking statements, including but not limited to: the impact of the COVID-19 global pandemic on Endeavor’s business, financial condition, liquidity and results of operations; changes in public and consumer tastes and preferences and industry trends; Endeavor’s ability to adapt to or manage new content distribution platforms or changes in consumer behavior; Endeavor’s dependence on the relationships of its management, agents, and other key personnel with clients; Endeavor’s dependence on key relationships with television and cable networks, satellite providers, digital streaming partners, corporate sponsors, and other distribution partners; risks related to Endeavor’s organization and structure; and other important factors discussed in Part II, Item 1A “Risk Factors” in Endeavor’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, as any such factors may be updated from time to time in its other filings with the SEC, accessible on the SEC’s website at www.sec.gov and Endeavor’s Investor Relations site at investor.endeavorco.com. Forward-looking statements speak only as of the date they are made and, except as may be required under applicable law, Endeavor undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit |
Description | |
| 10.1* | Amendment to the Equity Purchase Agreement, dated June 30, 2022 by and among Endeavor Group Holdings, Inc., Endeavor Operating Company, LLC and Light & Wonder, Inc. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
| * | Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ENDEAVOR GROUP HOLDINGS, INC. | ||
| By: | /s/ Jason Lublin | |
| Name: | Jason Lublin | |
| Title: | Chief Financial Officer | |
Date: June 30, 2022
Exhibit 10.1
EXECUTION VERSION
AMENDMENT NO. 1 TO THE EQUITY PURCHASE AGREEMENT
This AMENDMENT NO. 1 TO THE EQUITY PURCHASE AGREEMENT is entered into as of June 30, 2022 (this “Amendment”), by and between Endeavor Operating Company, LLC, a Delaware limited liability company (“Buyer”), Light & Wonder, Inc. (formerly known as Scientific Games Corporation), a Nevada corporation (“Parent”), and Endeavor Group Holdings, Inc., a Delaware corporation (collectively, the “Parties”). Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Equity Purchase Agreement (as defined below).
WHEREAS, the Parties entered into that certain Equity Purchase Agreement, dated as of September 27, 2021 (as it may be amended, amended and restated, supplemented or otherwise modified from time to time, the “Equity Purchase Agreement”);
WHEREAS, pursuant to Section 9.04 of the Equity Purchase Agreement, the Equity Purchase Agreement (including the Parent Disclosure Letter) may be amended or modified by a written instrument signed by the Parties; and
WHEREAS, each of the Parties wishes to amend and modify the Equity Purchase Agreement and Parent Disclosure Letter as set forth herein.
NOW, THEREFORE, the Parties agree as follows:
1. Amendments.
(a) Annex 1.01(b) of the Parent Disclosure Letter is hereby amended and restated in its entirety as set forth on Exhibit A hereto.
(b) Article V of the Equity Purchase Agreement is hereby amended by adding the following as Section 5.27 of the Equity Purchase Agreement:
“SECTION 5.27. Commercial Arrangement. Following Closing, Buyer and Parent shall enter into the commercial arrangement set forth on Section 5.27 of the Parent Disclosure Letter.”
(c) The Parent Disclosure Letter is hereby amended by adding Exhibit B hereto as Section 5.27 of the Parent Disclosure Letter.
(d) Section 7.01(b)(i) of the Equity Purchase Agreement is hereby amended and restated in its entirety as follows:
“(i) subject to Section 7.01(b)(i) of the Parent Disclosure Letter, the Closing has not occurred on or before September 27, 2022 (the “Outside Date”); provided that
(i) the conditions set forth in Sections 6.01(a), 6.01(b) or 6.01(c) (with respect to the approvals contemplated by Section 6.01(a) or Section 6.01(b)) are not satisfied as of such date, the Outside Date shall automatically be extended to December 30, 2022 and (ii) a party shall not have the right to terminate this Agreement pursuant to this Section 7.01(b)(i) if such party has failed to perform any covenant or agreement in this Agreement which failure has been the proximate cause of the failure of the Closing to occur; or”
(e) Section 7.01(b)(i) of the Parent Disclosure Letter is hereby amended and restated in its entirety as set forth on Exhibit C hereto.
(f) The defined term “Cash Consideration” in Section 9.02 of the Equity Purchase Agreement is hereby amended and restated in its entirety as follows:
“Cash Consideration” means $750,000,000.
(g) The defined term “Stock Consideration” in Section 9.02 of the Equity Purchase Agreement is hereby amended and restated in its entirety as follows and relocated to appear in appropriate alphabetical order:
“Stock Consideration” means 2,305,794 Buyer Pubco Class A Common Shares (as may be equitably adjusted for any stock split, reverse stock split or extraordinary dividend (excluding for the avoidance of doubt, any tax-related distributions and regular quarterly cash dividends in respect of Buyer Pubco Class A Common Shares which dividends, for the avoidance of doubt, may be increased or decreased in amount from quarter to quarter at the discretion of the board of directors of Buyer)).
(h) The Parent Disclosure Letter is hereby amended by adding Exhibit D hereto as Section 9.02(g) of the Parent Disclosure Letter.
(i) The Parent Disclosure Letter is hereby amended by adding Exhibit E hereto as Section 9.14 of the Parent Disclosure Letter.
(j) Section 9.02 of the Buyer Disclosure Letter is hereby amended and restated in its entirety as set forth on Exhibit F hereto.
2. Effectiveness. This Amendment shall become effective as of the date hereof.
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3. Effect of Amendment. This Amendment shall not constitute a waiver, amendment or modification of any provision of the Equity Purchase Agreement or the Parent Disclosure Letter not expressly referred to in Section 1 of this Amendment. Except as specifically modified and amended hereby, the Equity Purchase Agreement shall remain unchanged and in full force and effect. References in the Equity Purchase Agreement to “this Agreement”, “herein”, “hereunder”, “hereto”, “hereof” and words of similar import shall refer to the Equity Purchase Agreement as amended hereby, and references to the date of the Equity Purchase Agreement, and references to the “date hereof”, “the date of this Agreement” or words of similar meaning in the Equity Purchase Agreement, shall continue to refer to September 27, 2021.
4. Waiver of Accounting Principles. By its execution of this Amendment, Buyer hereby consents, pursuant to Section 4.01(b)(xiii) of the Equity Purchase Agreement, to Parent’s use of the accounting principles set forth on Section 9.02(g) of the Parent Disclosure Letter.
5. Release. By their execution of this Amendment, Buyer and Parent hereby agree to the release set forth on Section 9.14 of the Parent Disclosure Letter.
6. Waiver and Consent of Buyer. Buyer hereby (i) unconditionally and irrevocably waives, and consents to, any actions taken, or failure to take action, of Parent or any of its Affiliates prior to the date of this Amendment that may constitute an inaccuracy under, a breach or violation of or a failure to comply with the Equity Purchase Agreement, in each case to the extent known to the Knowledge of Buyer as of the date of this Amendment, including the matters occurring prior to the date of this Amendment set forth in Section 9.14 of the Parent Disclosure Letter, for all purposes, and (ii) unconditionally and irrevocably waives each of the conditions set forth in Section 6.02(a) and Section 6.02(b) of the Equity Purchase Agreement with respect to any such inaccuracy, breach, violation or failure; provided that, clause (i) shall not apply to any actions taken, or failure to take action, of Parent or any of its Affiliates relating to the Specified Matters (as defined in Section 9.14 of the Parent Disclosure Letter).
7. Waiver and Consent of Parent. Parent hereby (i) unconditionally and irrevocably waives, and consents to, any actions taken, or failure to take action, of Buyer or any of its Affiliates prior to the date of this Amendment that may constitute an inaccuracy under, a breach or violation of or a failure to comply with the Equity Purchase Agreement, in each case to the extent known to the Knowledge of Parent as of the date of this Amendment, including the matters occurring prior to the date of this Amendment set forth in Section 9.14 of the Parent Disclosure Letter, for all purposes, and (ii) unconditionally and irrevocably waives each of the conditions set forth in Section 6.03(a) and Section 6.03(b) of the Equity Purchase Agreement with respect to any such inaccuracy, breach, violation or failure; provided that, clause (i) shall not apply to any actions taken, or failure to take action, of Buyer or any of its Affiliates relating to the Specified Matters (as defined in Section 9.14 of the Parent Disclosure Letter).
8. Miscellaneous. The provisions of the Confidentiality Agreement and Sections, 8.06 (Exclusivity, No Duplicate Recovery), 9.01 (Notices), 9.03 (Interpretation), 9.04 (Amendment), 9.05 (Extension; Waivers), 9.06 (Severability), 9.07 (Counterparts), 9.08 (Entire Agreement; Third-Party Beneficiaries), 9.09 (Governing Law), 9.10 (Assignment), 9.11 (Enforcement) and 9.12 (Jurisdiction; Consent to Service of Process) of the Equity Purchase Agreement are incorporated herein by reference mutatis mutandis and shall be binding upon the Parties.
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[Signature Pages Follow]
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IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be duly executed as of the date first written above.
| ENDEAVOR OPERATING COMPANY, LLC | ||
| By: | /s/ Jason Lublin | |
| Name: | Jason Lublin | |
| Title: | Chief Financial Officer | |
| LIGHT & WONDER, INC. | ||
| By: | /s/ James Sottile | |
| Name: | James Sottile | |
| Title: | Executive Vice President and Chief Legal Officer | |
| ENDEAVOR GROUP HOLDINGS, INC. | ||
| By: | /s/ Jason Lublin | |
| Name: | Jason Lublin | |
| Title: | Chief Financial Officer | |
[Signature Page to Amendment No. 1 to Equity Purchase Agreement]
Exhibit A
Annex 1.01(b) of the Parent Disclosure Letter
Exhibit B
Section 5.27 of the Parent Disclosure Letter
Exhibit C
Section 7.01(b)(i) of the Parent Disclosure Letter
Exhibit D
Section 9.02(g) of the Parent Disclosure Letter
Exhibit E
Section 9.14 of the Parent Disclosure Letter
Exhibit F
Section 9.02 of the Buyer Disclosure Letter
Document and Entity Information |
Jun. 30, 2022 |
|---|---|
| Cover [Abstract] | |
| Amendment Flag | false |
| Entity Central Index Key | 0001766363 |
| Document Type | 8-K |
| Document Period End Date | Jun. 30, 2022 |
| Entity Registrant Name | Endeavor Group Holdings, Inc. |
| Entity Incorporation State Country Code | DE |
| Entity File Number | 001-40373 |
| Entity Tax Identification Number | 83-3340169 |
| Entity Address, Address Line One | 9601 Wilshire Boulevard |
| Entity Address, Address Line Two | 3rd Floor |
| Entity Address, City or Town | Beverly Hills |
| Entity Address, State or Province | CA |
| Entity Address, Postal Zip Code | 90210 |
| City Area Code | (310) |
| Local Phone Number | 285-9000 |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Security 12b Title | Class A Common Stock, $0.00001 par value per share |
| Trading Symbol | EDR |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |