William Morris Endeavor and its private equity backer, Silver Lake Partners, have won the auction for IMG, the sports and talent agency, according to people familiar with the matter.
WME is said to have won the bidding war with an offer of about $2.3 billion, beating out two other groups that had submit final round bids on Friday.
Peter Chernin, the former News Corporation executive, was working with CVC Capital, and the talent agency ICM was working with the Carlyle Group. Both of those groups are believed to have offered less than $2 billion.
An official announcement is expected on Wednesday.
IMG represents athletes including the Denver Broncos quarterback Peyton Manning and pop stars such as Justin Timberlake and Taylor Swift. But the company makes most of its money through a range of media licensing and distribution services.
All the parties declined to comment.
The sale for IMG was prompted by the 2011 death of Theodore J. Forstmann, a founder of the Forstmann Little private equity firm.
Forstmann Little acquired IMG for $750 million in 2004 and set about expanding it from primarily a talent agency into a broader sports and marketing agency.
But upon Mr. Forstmann’s passing, the firm decided to unwind and began seeking buyers for its various assets.
Earlier this year, Evercore Partners and Morgan Stanley were hired to sell IMG. Forstmann Little was hoping to fetch a price of at least $2 billion, according to people briefed on the matter, and the banks reached out to an unusually large pool of potential buyers.
The process initially drew in buyout firms including Bain Capital, Blackstone, Kohlberg Kravis Roberts, as well as sovereign wealth funds and even advertising groups. Buyers were emboldened by the attractive debt markets, and enticed by the prospect of owning a trophy asset.
At one point Creative Artists Agency, the main rival to WME, was considering a bid with its own private equity backer, TPG. But C.A.A. backed away from a bid in part because absorbing IMG would have upset the balance of its partnership structure, according to people briefed on the matter.
But many buyers balked at Forstmann Little’s price expectations, believing that despite the high-profile names on the company’s roster, taking costs out of the business while maintaining its profitability would make IMG a difficult asset to own.
From the start of the auction, WME, led by Ariel Emanuel, was always seen as a front-runner in the auction. Mr. Emanuel is said to see the benefit of expanding WME’s range of services into areas where IMG has excelled. And his private equity backer, Silver Lake, was in favor of the deal and prepared to write a sizable check.
Michael J. de la Merced contributed reporting.
