UTA sells minority stake in a bid for capital to fund aggressive expansion

In a move intended to fuel its ambitious plans for expansion, United Talent Agency has sold a minority stake in the company to Investcorp and the Public Sector Pension Investment Board, bringing an infusion of capital to the company at a time when Hollywood’s top agencies are jostling each other to move into TV and film production.

UTA said Tuesday that capital from Investcorp and PSP Investments will be used to accelerate its growth plans and enhance its client services. While UTA didn’t disclose the size of the transaction, individuals with knowledge of the deal estimated the stake in the mid to high 30% of the company, with the capital investment valued at approximately $200 million.

The deal is UTA’s most significant stake sale since private equity investor Jeffrey Ubben acquired an undisclosed minority share in the agency in 2015.

The senior executive leadership of the privately held UTA will remain in place. UTA’s partnership maintains majority ownership and control of the company.

Based in Bahrain, Investcorp is an investment management firm with more than $22 billion in total assets under management. The Canadian PSP Investments is one of the country’s major pension investment managers.

“This is a transformative event for UTA,” UTA Chief Executive Jeremy Zimmer said in a statement. “We were deliberate about finding the right investment partners who recognize UTA as a business that puts clients first, exemplifies a collaborative and diverse culture, and is focused long term on capitalizing on the unique opportunities that disruption and transformation provide.”

Zimmer and co-presidents David Kramer and Jay Sures led the process of choosing the new investors.

UTA, based in Beverly Hills, said it has more than doubled in size in the last five years to more than 900 employees. The agency has also beefed up its corporate representation, recently signing Coca-Cola and General Motors as clients.

Like other major Hollywood agencies, UTA has been expanding its business portfolio beyond talent representation. The agency recently acquired an equity stake in Core, which was recently renamed Industrial Media, the production company behind the relaunched “American Idol” reality competition series.

Both Endeavor and Creative Artists Agency have moved into the lucrative TV and movie production fields, breaking with the long-held Hollywood separation between studios and talent agencies. Private equity firms have increasingly invested more money in these two agencies, propelling them into new businesses in a bid for growth.

UTA is now casting itself as a major competitor against these mega-agencies.

“The entertainment industry is experiencing tremendous evolution,” said Simon Marc, managing director and head of private equity at PSP Investments. “As demand for high-quality content is greater than ever, UTA is uniquely positioned to benefit from the transformation in the sector.”

Other talent agencies have also been attracting interest from foreign investors. The Saudi Arabian sovereign wealth fund — a public fund that the government uses to invest in projects at home and abroad — recently explored acquiring a less than 10% stake in Endeavor, which was previously known as WME/IMG. The acquisition is estimated to be worth between $400 million and $500 million.

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