A leading sports betting company revealed its acquisition plans on Friday morning. Although, the target company already has an existing purchase offer from a competing firm.
DraftKings is offering $195 million cash to acquire the PointsBet U.S. business, which offers a 30% premium to the Fanatics previous offer.
“While we continue to focus on operating more efficiently and driving substantial organic revenue growth in the United States, we will also look to prudently capitalize on compelling opportunities at attractive valuations, as is the case with PointsBet’s U.S. business,” DraftKings CEO Jason Robins said.
A letter to PointsBet said it believed the deal could be completed in three weeks.
PointsBet is a leading U.S. sports betting operator and has a top 10 market share position in several states.
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Why It’s Important: The acquisition of PointsBet’s U.S. business could continue to scale the DraftKings business and also accelerate its path to profitability.
DraftKings highlighted the investment case for the acquisition in its letter to PointsBet. The company sees the deal enhancing its product, adding in-house capabilities, and offering “considerable synergies.”
Fanatics is considered to be one of the biggest upstart competitors in the sports betting space given its existing customer list from other businesses, partnerships with teams and leagues, and strong financing and financials.
Fanatics launched online sports betting in Tennessee, Maryland, Massachusetts and Ohio earlier this year.
DKNG Price Action: DraftKings shares are up 0.4% to $24.94 during early trading on Friday. Shares are up over 100% year-to-date in 2023.
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