Fanatics has decided to procure PointsBet’s US business, marking the sports giant’s first big foray into US sports betting.
The value of this transaction is $150 million in cash. The firms announced the deal yesterday night as soon as CNBC published that they had reached an agreement.
The companies announced in a joint statement, “Fanatics and PointsBet are excited to enter into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s U.S. business. While there are still several steps in the process to complete the acquisition, both parties are confident in the outcome. Fanatics Betting and Gaming and PointsBet will provide further details of the proposed deal and timely updates in the coming weeks.”
According to people acquainted with the deal who wanted to remain anonymous since the discussions were confidential, Fanatics will obtain access to 15 states with the deal. According to one of the sources, Fanatics plans to gain access to the majority of states where PointsBet operates before the start of the NFL season.
PointsBet’s shares are listed in Australia, and a shareholder vote on the acquisition is likely in late June. Only PointsBet’s assets in the United States are included in the transaction. Fanatics intends to cover part of PointsBet’s remaining cash flow burn, which has had to spend extensively on marketing in order to keep up with bigger rivals like DraftKings and FanDuel.
PointsBet predicts a loss in the range of $77 million to $82 million for the second half of 2023. Quoting “very challenging” market conditions, the firm stated Sunday that it would be necessary to raise surplus capital at a “significant discount to recent market prices” in the near term if the agreement with Fanatics broke somehow.
As per PointsBet, NBC Universal will obtain its revenue from its last deal with PointsBet and will no longer possess any equity shares. In 2020, NBC gained a 4.9% equity share in PointsBet.
Over the last year, Fanatics has been in negotiations with several different sports betting businesses as it plots its next steps in mobile gaming.
“This is a 10-year journey,” the CEO of Fanatics Betting, Matt King, said at the SBC Conference earlier this month. “We’re going to move very methodically through that 10-year journey. And by doing that and taking that approach, it allows you to be a bit more considered in your decisions. You can kind of move slower, slightly slower today, in order to move fast later.”
Fanatics is a sports platform firm with a $31 billion private valuation. The business anticipates $8 billion in revenue in 2023.
Fanatics holds retail properties, is a sports trading card company, and is developing a sports betting segment. Last year, the business paid $500 million for the renowned trading card maker Topps.
