| 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