(Sept 28): Endeavor Group Holdings Inc., the talent agency and live-events promoter, agreed to buy the sports gambling company OpenBet from Scientific Games Corp. for US$1.2 billion in cash and stock.
The acquisition will build Endeavor’s position in the growing sports-betting industry, the company said Monday in a statement. Endeavor already operates IMG Arena, which works with sportsbooks to deliver official live streaming video and data feeds.
The deal combines companies that work with both major gaming companies and sports leagues. OpenBet’s more than 75 clients include DraftKings Inc., FanDuel, WynnBet, SkyBet, Ladbrokes and William Hill. IMG Arena’s lineup includes the PGA tour, Ryder Cup, UFC and others.
Endeavor will form a new division that combines the two businesses. It expects revenue from the new unit to hit US$340 million next year. OpenBet on its own produced sales of US$100 million last year, according a presentation on Endeavor’s website.
Scientific Games jumped as much as 12% to US$93 in late trading after the deal was announced. It rose 2.1% to US$82.95, an all-time closing high, in regular trading in New York. Endeavor gain as much as 7.9% to $29.48 in extended trading before retreating somewhat.
Under the terms, Scientific Games will receive US$1 billion in cash and US$200 million of Endeavor Class A shares.
Scientific Games, one of the world’s largest makers of slot machines and other products for casinos, has been in the process of trying to sell its sports betting and lottery divisions to reduce debt and refocus the company. The company intends to folks on its proprietary games that can be played in land-based casinos as well as online.
Barry Cottle, Scientific Games’ chief executive officer, said in an interview the company had a lot of interest in the sports-betting business, but thought Endeavor would be the best fit. Scientific Games is still reviewing options for the lottery business that could include a public offering.
“The process is still underway and we’re exploring multiple paths,” Cottle said. “We have every bit of confidence that we’ll be able to significantly de-lever and have enough dry powder to invest in the gaming vision that we have.”