CAA is looking to raise around $400M to buy back equity from its agents and executives.
This is a meaningful way of rewarding the agency’s top earners who’ve built the company, while keeping them in house — a move that’s very much akin to the upside an IPO would bring. CAA’s move to raise such cash comes in the wake of the Endeavor withdrawing its IPO.
The financing, which should come together within the next few weeks has CAA borrowing $1.15 billion in a seven-year loan so as to refinance close to $760M in debt. That debt stems from a number of activities including acquisitions made on behalf of CAA. TPG, Bank of America, Credit Suisse, and UBS are syndicating the loan. With interest rates being so low right now, we hear this is a prime time to embark on such financing.
Once funded, employees with equity positions will have the option to sell less than half of them, or ride out the upsides of their stakes. CAA’s Bryan Lourd, Richard Lovett and Kevin Huvane will have the option to sell shares, thought the majority of the agency’s 2K staff do not have any equity stakes.
I understand that CAA stakeholders are TPG, Temasek and China Media Capital are all supportive of the agency’s raising of capital, but will not be selling any of their shares.
Back in 2010 and 2014, CAA’s top stakeholders reaped profit when TPG invested in the company.
CAA did not provide any comment when reached.
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