Super Group, the holding company of online sports betting and gambling operator Betway, has entered into a definitive agreement to merge with special purpose acquisition business Sports Entertainment Acquisition Corp. (SEAC) and expand its offering into the US market.
Under the arrangement, Super Group will combine with SEAC and apply to list shares on the New York Stock Exchange under the new ticker symbol ‘SGHC’, with the new business to operate under the name Super Group.
SEAH agreed to combine with Super Group, which also owns the Spin multi-brand online casino business, based on a $4.75bn pre-money equity valuation.
Assuming there are no redemptions by SEAH shareholders, the transaction will deliver approximately $450m of cash to the combined business, while Super Group’s existing shareholders will hold approximately 88% of shares in the combined company, with the new-look group to have approximately $200m in cash upon closing.
The agreement also stated that shareholders comprising more than 70% of Super Group’s equity will not sell any shares and instead roll their equity positions into the new, public company.
The boards of both Super Group and SEAH have unanimously approved this transaction, and while the deal remains subject to the approval of SEAH shareholders and other customary closing condition, the merger is expected to close in the second half of this year.
The combined group is forecast to post more than $1.5bn in net gaming revenue and over $350m in earnings before interest, tax, depreciation and amortization (EBITDA) in 2021, with this forecast to rise to $1.7bn and $420m, respectively, in 2022.
“We have established our group as a truly global, scaled and profitable digital gaming business, delivering on our vision to bring first-class entertainment to the worldwide betting and gaming community,” Super Group chief executive Neal Menashe said.
“Becoming a public company will give us the tools to continue to grow our leading product and technology offering and deliver a strengthened brand-driven marketing strategy.”
SEAH chairman Eric Grubman added: “Super Group is an online gaming and betting powerhouse with a track record of global growth and a strong balance sheet. Super Group’s core DNA is rooted in digital technology, which drives its unparalleled expertise in data and analytics.”
In relation to its planned expansion into the US, Super Group has entered into an agreement to acquire Digital Gaming Corporation (DGC), subject to customary regulatory approvals.
DGC holds the exclusive right to use the Betway brand in the US and has already secured market access for online sports betting and gambling in an initial 10 states including New Jersey, Pennsylvania, Colorado, Indiana and Iowa, processing its first bet in the US in March this year.
Super Group has also appointed former National Football League (NFL) executives Eric Grubman and John Collins to head up its expansion plans in the US.
“This listing will position us strongly to capitalize on the significant global growth opportunities ahead ‒ including in the US market ‒ enabling us to further expand our robust, loyal and engaged customer base,” Menashe said.
“In Eric and John, we have found the perfect partners with expertise across sports, entertainment and public markets to help us navigate our next phase of growth.”