SoftBank said Wednesday it is investing $250 million in WME-IMG, the media, sports and fashion agency.
SoftBank is joining WME-IMG's current investor, private equity firm Silver Lake. A source close to the situation said the deal values WME-IMG at about $5.5 billion.
Instead, this infusion of cash is intended to fuel more deals, following WME-IMG's busy 2015. It made 12 acquisitions and four strategic joint ventures, including the creation of an eSports league.
The company has been diversifying from reliance on traditional Hollywood talent representation, with the addition of businesses including the Professional Bull Riders and Miss Universe. The company also produces live events around the world — such as fashion weeks, pro golf tournaments and "taste festivals" with the company's chef clients.
The fact that this investment comes less than 18 months after WME's acquisition of sports agency IMG for $2.4 billion — considered a risky bet — can be seen as a validation of that deal. While raising the profile of the company in the investment community, this cash from SoftBank also likely delays the IPO that's been expected from the firm that's led by Hollywood agents Ari Emanuel and Patrick Whitesell. The move to hire former General Motors and Microsoft CFO Chris Lidell in July of 2014 also can be seen as another step to prepare the company to eventually go public.