- DraftKings, a digital sports entertainment and gaming company known for daily fantasy sports and mobile sports betting platforms, announced it is going public through a business agreement with Diamond Eagle Acquisition and SBTech
DraftKings — a digital sports entertainment and gaming company that is known for daily fantasy sports and mobile sports betting platforms — announced it has entered a definitive business combination agreement with Diamond Eagle Acquisition and SBTech. Diamond Eagle Acquisition is a publicly-traded special purpose acquisition company. And SBTech is an international turnkey provider of cutting-edge sports betting and gaming technologies.
This combined company is going to become the only vertically-integrated pure-play sports betting and online gaming company based in the US. And this transaction is expected to close in the first half of 2020.
This deal is expected to close in the first half of 2020. And in connection with the closing of the deal, Diamond Eagle intends to change its name to DraftKings Inc. and reincorporate in Nevada. It will remain Nasdaq-listed under a new ticker symbol.
“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,” said DraftKings co-founder and CEO Jason Robins. “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.”
And the new DraftKings will continue to be led by co-founder and CEO Jason Robins. And it will retain DraftKings’ experienced management team, including co-founders Paul Liberman and Matthew Kalish. The SBTech management team — who brings a wealth of international markets, trading, and risk management experience — will also be integrated into the organization.
The Institutional investors — including funds managed by Capital Research and Management Company, Wellington Management Company, and Franklin Templeton — have committed to a private investment of $304 million in Class A common stock of the combined company that will close concurrently with the business combination. And subject to any redemptions by DEAC stockholders, there is $400 million currently held in Diamond Eagle’s trust account.
“We are pleased to bring DraftKings and SBTech together as one public company,” explained Harry E. Sloan, founding Investor of Diamond Eagle. “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.”
It is expected that the combined company will have an equity market capitalization at the closing of approximately $3.3 billion and have over $500 million of unrestricted cash on the balance sheet.
“The combination of DraftKings and SBTech brings together two tech-native companies with the customer at their cores,” added SBTech Chairman Gavin Isaacs Chairman. “SBTech will maintain its core business and continue its B2B focus. We are excited about the opportunity to join a company with a similar innovation DNA and create a unique and differentiated player in global sports betting and online gaming.”
Goldman Sachs is acting as the exclusive financial advisor to Diamond Eagle. And 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 the legal advisors to SBTech. Goldman Sachs and Credit Suisse are acting as the private placement agents to Diamond Eagle.