Fanatics, a prominent sports platform company, has made its entry into the U.S. sports betting market with the acquisition of PointsBet's U.S. operations.
The deal, valued at approximately $150 million in cash, was announced on Sunday night following reports of an agreement between the two companies.
In a joint statement, Fanatics and PointsBet expressed their excitement about the acquisition and their confidence in its successful completion. Both parties will provide further details and updates on the deal in the coming weeks.
With this acquisition, Fanatics will gain access to at least 15 states, expanding its reach in the U.S. sports betting industry. The company aims to have access to the majority of states where PointsBet operates by the start of the NFL season.
PointsBet, whose shares are traded in Australia, is expected to hold a shareholder vote on the deal in late June. The deal encompasses only PointsBet's U.S. assets, and Fanatics plans to assist in funding PointsBet's remaining cash flow needs, which have been driven by intensive marketing efforts to compete with larger rivals like DraftKings and FanDuel.
PointsBet, acknowledging the challenging market conditions, indicated that it would require additional capital at a discounted price if the deal with Fanatics fell through.
As part of the agreement, NBCUniversal will no longer hold an equity stake in PointsBet, and the proceeds from its previous deal with the company will be received.
Fanatics, with a private valuation of $31 billion, has been exploring opportunities in the mobile gambling sector and has engaged in discussions with several sports betting companies over the past year. The company aims to take a methodical approach to its expansion into the sports betting industry, considering its long-term vision.
In addition to its sports betting division, Fanatics owns various commerce assets and acquired renowned trading card company Topps for $500 million in 2022. The company has projected revenue of $8 billion for 2023.
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