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Softbank takes $250M stake in WME-IMG agency

Ari Emanuel
Getty Images
Ari Emanuel

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.

The entrance of the Japanese telecommunications and Internet giant, which has stakes in Alibaba and YahooJapan, is not being done to help current investors cash out.

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.

"SoftBank brings a unique industry perspective and a commitment to help us deliver valuable new opportunities to our clients and partners in markets around the world," co-CEOs Emanuel and Whitesell said in a release.

Emanuel and Whitesell have been focused on rapid growth and diversification since their Endeavor Agency announced it was merging with the older, more established William Morris Agency in April 2009. Soon after the new company was founded, WME helped co-found the Raine Group, a media-focused boutique bank and investment company, which has aligned the agency with the likes of Vice Media.

WME's main rival CAA, which also is partly owned by a private equity firm TPG, has also been increasingly focused on sports. CAA has made a number of acquisitions in the sports space — six in the last 11 months alone — but they've all been relatively small, with nothing close to the scale of WME's $2.4 billion acquisition of IMG.

Correction: An earlier version of this story had the wrong date of hire for Chris Lidell.