(Bloomberg) — DraftKings Inc. agreed to buy Golden Nugget Online Gaming Inc. in a deal valued at about $1.56 billion, expanding the fantasy-sports giant’s presence in the hot market for online betting.
DraftKings expects use the combined resources to boost sales and market share, yielding $300 million in savings from overlapping costs and creating new cross-selling opportunities, the companies said Monday in a statement. The deal, which has been approved by both companies’ boards, is expected to close in the first quarter of 2022.
The agreement gives DraftKings more casino-type betting games in addition to expanding its market share in sports wagering, which is gaining traction in the U.S. as more states legalize the business. Last week, DraftKings raised its revenue forecast for the year, citing strong demand. For Golden Nugget, the deal will cut third-party technology expenses and improve the customer experience by transitioning to DraftKings’ modernized systems.
Shares of Golden Nugget soared 47% at 9:36 a.m. in New York. DraftKings rose less than 1%.
Golden Nugget is backed by billionaire Tilman Fertitta, who took the company public through a blank-check transaction last year. As part of the latest deal, DraftKings will enter into a commercial agreement with Fertitta Entertainment Inc., the parent company of the Houston Rockets, Golden Nugget LLC and Landry’s LLC.
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DraftKings will reorganize its holding company, and Golden Nugget Online Gaming shareholders will receive 0.365 shares of DraftKings for each of their shares. Fertitta, who owns a 46% stake in Golden Nugget Online Gaming, agreed to continue to hold DraftKings shares that will be issued to him in the merger for at least one year.
(Updates with transction details and share trading beginning in third paragraph.)
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