The Fanatics Betting and Gaming (FBG) arm of sports retail giant Fanatics has agreed a deal to acquire the PointsBet US division of PointsBet Holdings for $150.0m.
Under the agreement, which remains subject to shareholder approval and certain regulatory and other conditions, PointsBet will retain both its Canadian and Australian business and operations and continue as an Australian Stock Exchange-listed company.
PointsBet will keep hold of its proprietary sports wagering, racing and igaming platform and be granted a perpetual, royalty-free license to exploit the Banach technology assets, which were acquired by PointsBet in March 2021.
The deal also states that PointsBet will retain its teams in Australia, Canada and India, as well as its Australian-based technologists, traders and quants.
Other aspects of the deal include that PointsBet will provide services to FBG prior to the final closing of the deal and be reimbursed for the cost of these services by FBG.
In addition, the existing commercial commitments to NBCUniversal will be transferred in full to FBG, while NBCUniversal released PointsBet from guarantee obligations under its media services agreement and waived its right to exercise equity options previously issued.
PointsBet shareholders will vote on the proposed acquisition at a meeting late next month, with the PointsBet board having unanimously recommended that shareholders vote in favour of the deal.
Should the transaction go through, PointsBet would distribute to shareholders the net sale proceeds, after applicable taxes and transaction costs, together with the majority of its corporate cash reserves that will be surplus to the needs of the remaining business. This distribution of capital is estimated to be approximately AU$1.07 to AU$1.10 per share.
Optimise value
“In view of the US market in which the company has significant operations, the board has explored and considered a wide range of strategic alternatives over an extended period of time,” PointsBet chairman Brett Paton said.
“Having considered all of the options potentially available to the company, the board believes the Fanatics Betting and Gaming proposal optimises value for shareholders.
“The acquisition by Fanatics Betting and Gaming of our US business will enable PointsBet to return significant capital to shareholders, while retaining strong Australian and Canadian businesses supported by our leading proprietary technology in a capital light setting.”
PointsBet managing director and group chief executive, Sam Swanell, added that the deal would deliver the most “attractive” risk-adjusted value outcome for shareholders, compared to the other options available to the operator.
“Fanatics Betting and Gaming has recognized our strategy, technology and team, as a platform for their own expansion in the online sports betting and igaming market,” Swanell said. “Given Fanatics significant presence in the US sports market, we consider them to be a natural acquirer of our US business.
“Importantly the proposed transaction removes the risks and capital requirements associated with executing the company’s United States strategy.”
Fanatics expansion
The deal comes as Fanatics continues to ramp up its sport betting activity in the US, following the launch of its Fanatics Betting and Gaming online and retail sports betting arm in January.
The division opened for business at the Washington Commanders’ FedExField in January and in doing so became the first retail sportsbook to open inside a National Football League venue.
Since this launch, the betting and gaming division joined the International Betting Integrity Association (IBIA)and pledged its support to the Responsible Gambling Collaborative (RGC), a group of leading online gaming operators in the US.
Recent media reports also suggest the business is planning to launch online sports betting in a number of states including Ohio and Tennessee.