Online sports betting operator Draftkings and tech supplier SBTech have confirmed that they have entered into a merger deal that will see the two companies becoming one entity after the deal is finalized, which is due to take place next year.
Draftkings is aiming to begin a new life as a publicly traded company and has also confirmed rumors in connection with its potential purchase by Nasdaq-listed Diamond Eagle Acquisition Corp, a ‘special-purpose acquisition company’ founded by Jeff Sagansky, a former Hollywood exec.
The deal with SBTech will expand Draftking’s geographic presence tremendously, which is currently almost entirely confined to the United States. SBTech at the moment derives 54% of its revenue from Asian markets and 42% from Europe.
The enhanced Draftkings is expected to generate projected net revenue of $540m in 2020, with $140m of that amount coming from SBTech.
Jason Robins, Chief Executive Officer of Draftkings, commented that the combination would create ‘a vertically-integrated powerhouse.’
Gavin Isaacs, Chairman at SBTech, said that the two companies shared a similar innovation DNA’ and the combination of two ‘tech-native companies with the customer at their cores’ would crush all rival firms like the insignificant insects they are.
Harry E. Sloan, Founding Investor of Diamond Eagle, said they are pleased to bring Draftkings and SBTech together as one public company. He added that Draftkings is already a premier online fantasy sports and betting platform and 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.