Sports betting giant DraftKings will go public as part of a $3.3 billion, three-way merger with SBTech and Diamond Eagle Acquisition Corp., a firm founded by Hollywood veterans Harry Sloan and Jeff Sagansky.
With legal restrictions around sports wagering beginning to ease across the country, DraftKings has been a leading participant in the rising tide of revenue from fantasy sports and mobile betting.
The combined company bills itself as the only vertically integrated sports betting and online gaming company in the U.S. After the merger closes in the first half of 2020, Diamond Eagle will change its name to DraftKings Inc., reincorporate in Nevada and remain listed on the Nasdaq under a new ticker symbol.
Jeff Sagansky & Harry Sloan Price Sixth Special-Purpose IPO At $600M
SBTech is a provider of technology for digital wagering. Diamond Eagle is a special purpose acquisition company, one of several publicly traded SPACs launched by Sagansky and Sloan. Sagansky’s career has included stints as CBS entertainment president, Sony Pictures co-head and CEO of Paxson Communications. Sloan was CEO of MGM and also led SBS Broadcasting.
The new DraftKings will continue to be led by Jason Robins, co-founder and CEO of DraftKings. The company will retain DraftKings’ management team, including co-founders Paul Liberman and Matt Kalish. The SBTech management team, specialists in international markets, trading and risk management, will also be integrated into the organization.
“The combination of DraftKings’ leading and trusted brand, deep focus on customer experience and data science expertise and SBTech’s highly innovative and proven technology platform creates a vertically-integrated powerhouse,” Robins said. “I look forward to building significantly upon our goals of continuing our state-by-state rollout and creating the most entertaining and engaging customer experiences for sports fans globally.”
Institutional investors (including funds managed by Capital Research and Management, Wellington Management and Franklin Templeton) have committed to a private investment of $304 million in the stock of the combined company. That investment will close concurrently with the merger.
“We are pleased to bring DraftKings and SBTech together as one public company,” Sloan said. “DraftKings is already a premier online fantasy sports and betting platform. With the full integration of SBTech’s technology and innovative product expertise coupled with the right capitalization, DraftKings will be in a great position to continue its ambitious expansion plans in the United States. I have known Jason Robins for four years, and consider him a true entrepreneur. I believe our investors share my utmost respect for his vision and leadership.”
Goldman Sachs is acting as exclusive financial advisor to Diamond Eagle. Raine Group is acting as exclusive financial advisor to DraftKings. Sullivan & Cromwell LLP is acting as legal advisor to DraftKings. Winston & Strawn LLP is acting as legal advisor to Diamond Eagle. Stifel is acting as financial advisor and Herzog, Fox & Neeman and Skadden, Arps, Slate, Meagher & Flom LLP are acting as legal advisors to SBTech. Goldman Sachs and Credit Suisse are acting as private placement agents to Diamond Eagle.
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.