UK-based sports betting data provider Genius Sports announced today it entered into a definitive business combination agreement with the special purpose acquisition company (SPAC) dMY Technology Group II.
Genius Sports Will Trade on the NYSE
The $1.5 billion deal with the blank-check company will allow Genius Sports to start trading on the New York Stock Exchange (NYSE) where dMY Technology II is currently listed. According to the business agreement, shareholders of Genius Sports and dMY will exchange shares for shares in a new combined company, NewCo, and upon closing of the deal the new entity will trade its ordinary shares and warrants under the symbols GENI and GENI WS, respectively.
In a press release sent to GamblingNews, Genius Sports revealed that its existing shareholders will receive a combination of cash and rollover equity in the new company. The two companies have been discussing the merger details for the past 3 months and the boards of both companies had already unanimously approved the combination which is expected to close in the first quarter of 2021, subject to certain closing conditions.
$276 million will be set aside in a dMY’s trust account for any future redemptions by dMY’s public stockholders, while another $330 million will be raised by a group of experienced industry investors which will participate in the transaction through a private investment in public equity (PIPE) at $10 per share. Proceeds of the PIPE from the group of unnamed investors will be used to repay share redemptions and shareholder loans.
Data Provides the Backbone of Sports Betting
The move which is valued at 8x the projected 2021 revenue of Genius Sports, $190 million, is targeting the growing sports betting industry in the US. Genius Sports collects and distributes official sports data without which wagering on sports events is unthinkable, and the company is partnering with organizations such as the English Premier League and the PGA Tour.
The combined group will target accelerated growth in the US and other international expansion opportunities, mainly through organic growth and merger and acquisition (M&A). Mark Locke, Genius Sports CEO, will retain the same role within the combined group and dMY II chairman Harry You and CEO Niccolo de Masi will join the new board of directors.
“This transaction will help us continue to expand and strengthen our position as a nexus of the global sports, betting and media ecosystem.”Mark Locke, CEO, Genius Sports
In July, dMY Technology Group II merged through a SPAC with Rush Street Interactive, in a $390 million deal, to form a combined firm woth more than $1.7 billion.
“…Mark Locke has pioneered the provision of official rights and live data which have been instrumental in building the modern sports betting market. The company has a strong track record of growth and we are very excited by the opportunities for further expansion in this rapidly growing segment.”Niccolo de Masi, CEO, dMY Technology Group II
The use of SPACs proved popular in the last year in which DraftKings merged with its technology provider SBTech to start trading on the NASDAQ, and Golden Nugget merged its online gaming division with Landcadia Holdings II, Inc.