Forstmann Little has decided to sell IMG Worldwide to the entertainment talent agency William Morris Endeavor (WME) and private equity firm Silver Lake Partners for between $2.3 and $2.4 billion, various outlets reported.
The talent representation and sports marketing company IMG is the biggest agency in tennis, representing a slew of top players including Novak Djokovic, Maria Sharapova, and Li Na. However, it lost two top clients in the past 18 months when both Roger Federer and Rafael Nadal left the fold.
IMG runs pro tournaments in Miami and Stanford, and has sponsor and licensing programs for the Australian Open and Wimbledon. It also has its name on the IMG Bollettieri Tennis Academy in Florida, and has large broadcasting arm. The company's IMG College division handles multimedia, marketing, ticket and licensing for more than 200 collegiate properties, including the NCAA.
Teddy Forstmann, the former chairman of IMG who died in 2011, bought the company for somewhere in the range of $700 to $750 million in 2004. That purchase occurred shortly after the death of IMG founder Mark McCormack, who was married to former WTA player Betsy Nagelsen and was an avid golf and tennis player and fan.
IMG is currently said to be the largest independent producer of sports programming in the world.
The deal is said to value IMG at roughly 13 times operating income. The price is said to be less than what the company wanted, but according to the Wall Street Journal is still a 30 percent premium to the valuation afforded the overall market.
WME, which makes most of its money in the entertainment industry, has a small presence in the sports world, while one of its main competitors, Creative Arts Agency, has built a big sports division. WME represents Serena Williams and former No. 1 Andy Roddick.
WME is run by Ari Emanuel, the brother of Chicago Mayor Rahm Emanuel, who was President Barack Obama’s former chief of staff.