Sports betting and daily fantasy sports operator DraftKings has announced plans to launch a public offering of new shares in the US, with the aim of raising $567m.
The offering will include 14m shares of new Class A common stock, with existing shareholders to sell a further further 19m of shares.
The selling stockholders may also grant the underwriters a 30-day option to buy up to an additional 4.95m shares of Class A common stock.
DraftKings said it would use any proceeds from the sale of its common stock for general corporate purposes, though it would not receive any proceeds from the sale of stock from existing stockholders.
Among the stockholders looking to sell off stock is Shalom McKenzie, the founder of SBTech, who will make 3,661,990 – 9.3% of his overall holding – available as part of the offering. Former SBTech chief executive Richard Carter will also sell 94,913 shares.
DraftKings’ chief executive and co-founder Jason Robins is looking to sell a total 13,695,566 in Class A shares, while John Salter, co-founder of global merchant bank Raine Group, is set to sell 23,170,880 Class A shares, 6.7% of his holding.
Robert Kraft, chief executive of the Kraft Group and owner of National Football League franchise the New England Patriots, will sell 339,199 shares. Ryan Moore, one of the first investors in DraftKings, will also make 1m shares available for sale.
NHL Enterprises, a subsidiary of the National Hockey League, will make 51,093 shares available for sales, while Legends Hospitality, founded by Jerry Jones, owner of NFL team the Dallas Cowboys, will seek to sell 20,437 shares.
Madison Square Garden Investments, whose owner the Dolan family also counts the likes of National Basketball teame New York Knicks and NHL franchise the New York Rangers among its assets, will look to offload 154,510 shares.
Goldman Sachs & Co. LLC and Credit Suisse Securities LLC will act as joint book-running managers and as representatives of the underwriters for the offering, which is subject to market and other conditions.
The proposed offering comes after DraftKings and SBTech last month revealed that they both saw revenue grow in the first quarter of 2020, but combined losses widened to $74.0m in the pair’s last full quarter before their merger closed.
DraftKings and SBTech generated combined revenue of $113.5m for the three months to 31 March, up from $90.0m in Q1 2019. The businesses officially merged in April, trading on the Nasdaq exchange under the DraftKings name.