Sportradar had a slight hiccup when it initially planned its initial public offering (IPO), but has been able to overcome it. The sports data and odds supplier was going to hook up with the Horizon Acquisition Corp. special purpose acquisition company (SPAC) in March, but the US Securities and Exchange Commission (SEC) threw a flag on the play and the deal was off. However, Sportradar didn’t let the setback become a deterrent and has now confirmed that its public launch is on track. If everything goes according to plan, it hopes to pick up almost $624 million in net proceeds by the time the share sale is completed.
Sportradar Advances IPO Plans
After March’s failed attempt, Sportradar filed for an IPO with the SEC last month. In a subsequent filing with the financial watchdog from yesterday, the company acknowledged that the launch is moving forward and Sportradar will soon be found on the Nasdaq Global Exchange under the ticker SRAD. The company explained that it will offer 19 million Class A shares at between $25-$28 each and, if all were sold at $28, the IPO launch would be worth $532 million, but that won’t happen. Sportradar expects around $504 million through the share float and another $159 million through a purchase agreement extended by Eldridge and Radcliff Management and other investors.
By the time all of the shares have been distributed and the money collected, Sportradar expects to have netted $623.9 million, assuming an IPO price of $26.50. The money will be used to drive the company’s growth, as well as to explore new acquisitions and investments. Acquisitions are at the top of the list in the sports betting industry right now, with new deals emerging on a daily basis. Flush with cash, Sportradar would be able to align itself with key players, which would drive its valuation higher.
Sportradar Intrinsically Tied to Major Sports Leagues
Sportradar’s business model seems to be working very well for the company. It has subscription and/or revenue sharing agreements with a number of betting operators and other industry players, such as DraftKings, ESPN, FanDuel and Twitter. It also has agreements with a number of sports leagues, including MLB, the NBA, NASCAR and the NHL. The latter just recently signed a ten-year agreement to use Sportradar as its official betting data and streaming rights partner, as well as its official media data rights and integrity partner. The company is also partnered with a couple of NFL teams, the Baltimore Ravens and the New York Jets.
As sports betting continues to reach new heights in the US, the IPO is well-timed. However, even as Sportradar comes off a banner 2020 that saw it report $26.1 million in net income, there is still the possibility that the public launch has difficulty gaining traction. While DraftKings continues to rise, moving from $51.11 on August 17 to $63.58 yesterday, not all gaming-related stocks are performing as well. Gambling.com has had a lot of difficulty since it went public a couple of months ago, and its stock is sputtering. It saw virtually no movement for almost all of August, staying at around $7.70, before finally jumping to $14.19 on August 27. However, it has continued to slide since then and, yesterday, closed at $10.22.