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EsportsUnited Talent Agency, LLC says United Talent Agency are unchanged following proposed acquisition
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United Talent Agency, LLC says United Talent Agency are unchanged following proposed acquisition

Announcement: Moody’s says United Talent Agency ratings are unchanged following proposed acquisitionGlobal Credit Research – 09 Dec 2021New York, December 09, said United Talent Agency, LLC’s (“UTA”) ratings are unchanged following a proposed acquisition that will be funded with a $50 million incremental term loan B, capacity under the existing revolving credit facility, and a modest amount of cash from the balance sheet.The incremental term loan is expected to be fungible with the existing term loan.The proposed acquisition will enhance UTA’s existing service offering, modestly increase scale and growth potential.UTA’s pro forma leverage will increase to approximately 4.3x from 3.5x as of Q3 2021 (including Moody’s standard adjustments).Moody’s projects leverage will decline as a result of good EBITDA growth, but additional acquisitions may significantly impact the pace of deleveraging going forward.UTA’s operating performance has recovered strongly from the impact of the pandemic and year-to-date revenue has substantially exceeded that of the comparable period in 2019 as television and motion picture production resumed operations and newer business lines such as digital talent and podcasting continue to expand.The music division has been slower to recover, but Moody’s expects revenue from concerts and events to return to pre-pandemic levels in 2022.

Sports related revenues expanded due to prior investments in sports representation and were not as impacted by the coronavirus given the largely contractual revenue streams despite many professional sports being held with limited or no fans in attendance during the pandemic.Moody’s expects that UTA will continue to benefit from the increasing value of original content worldwide over the next several years given the strong demand for content from existing media companies and new streaming services.

Additional investments in existing business lines and acquisitions are likely in the future that will further increase UTA’s scale and diversify operations.The existing $100 million revolving credit facility will be almost fully drawn following the transaction and there will be little revolver availability in the near term.While UTA has a significant cash balance pro forma for the transaction as of Q3 2021 ($171 million), cash will decrease from bonus payments and equity distributions in Q4 2021.Moody’s expects the cash balances to increase again in the beginning of 2022 due to good operating cash flow and the strength in the underlying business.UTA’s parent company invested in a special purpose acquisition company (SPAC) that closed on December 1, 2021 that will target the acquisition of businesses in the gaming, digital media, creator economy, entertainment and technology industries.While the SPAC is likely to benefit from UTA’s relationships and knowledge of the media industry, Moody’s does not currently expect UTA will use a portion of its existing cash balance for any additional investments in the SPAC.UTA is a diversified client representation agency that represents writers, producers, directors, actors, and public speakers as well as others.In addition, the company’s music touring business represents musicians in live touring as well as services representing social influencers, streamers, and brands in esports.UTA also provides investment advisory services in media and entertainment and expanded its sports representation business through the acquisition of a majority ownership position in Klutch Sports Group in 2019 as well as the purchases of other sports representation agencies.Revenues as of LTM Q3 2021 were approximately $455 million.This Scott Van den Bosch VP – Senior Credit Officer Corporate Finance Group Moody’s Investors Service, Inc.

250 Greenwich Street New York, NY 10007 U.S.A.JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Stephen Sohn Associate Managing Director Corporate Finance Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Investors Service, Inc.250 Greenwich Street New York, NY 10007 U.S.A.JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 .