Â© Reuters. FILE PHOTO: The Endeavor Group Holdings Inc. (EDR) logo hangs on the New York Stock Exchange on the morning of its listing on the NYSE in New York City, United States, on April 29, 2021. REUTERS / Shannon Stapleton
By Krystal Hu and Niket Nishant
(Reuters) -Endevor Group Holdings Inc, the owner of the Ultimate Fighting Championship, will acquire the sports betting business OpenBet from. acquire Scientific games (NASDAQ 🙂 Corp for $ 1.2 billion in cash and shares, the company announced on Monday.
Endeavor, whose shares are up nearly 10% in expanded trading, said the acquisition will strengthen its position in the sports betting industry.
The company plans to combine OpenBet, sports betting and games software, with its existing sports betting business IMG ARENA.
The deal comes at a time when the online gambling room has witnessed frenetic deals as more states in the United States are expected to legalize the industry.
Last week, UK gaming company Entain announced that it had received a takeover proposal from US fantasy sports betting company DraftKings (NASDAQ 🙂 valued at $ 22.4 billion.
The demand for online betting has boomed during the pandemic as customers moved to gamble from home when casinos and betting shops were off limits.
The OpenBet deal, expected to close in the second quarter of 2022, will be funded by $ 1 billion in cash and $ 200 million in Endeavor Class A common stock, the companies said.
Las Vegas-based Scientific Games, known as a major slot machine manufacturer, previously announced its plan to divest its lottery and sports betting businesses to reduce leverage and move to a games and digital content provider.
“Through the transaction, we would be able to have a healthy balance sheet and dry powder to really rely on games,” said Barry Cottle, chief executive officer of Scientific Games, in an interview with Reuters on Monday.
Oakvale Capital and Macquarie Capital advised Scientific Games on the transaction, while Raine Group acted as financial advisor to Endeavor.
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