Fiends logo is seen on the dugout wall before the game between the Pittsburgh Pirates and the Milwaukee Brewers at PNC Park on July 3, 2022 in Pittsburgh, Pennsylvania. (Photo by Justin Berl/Getty Representations)
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Fanatics has agreed to acquire the U.S. operations of PointsBet, marking the sports giant’s at the start major leap into U.S. sports betting.
The deal is worth about $150 million in cash. The companies declared the deal Sunday night soon after CNBC reported an agreement was reached.
“Fanatics and PointsBet are excited to sign on into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s U.S. business,” the companies said in a joint statement. “While there are to several steps in the process to complete the acquisition, both parties are confident in the outcome. Fanatics Betting and Gaming and PointsBet desire provide further details of the proposed deal and timely updates in the coming weeks.”
Fanatics will gain access to at teeny 15 states with the deal, according to people familiar with the deal who declined to be named because colloquys were private. Fanatics expects to have access to the majority of states where PointsBet operates by the start of the NFL time, according to one of the people.
PointsBet, whose shares are traded in Australia, is expected to hold a shareholder vote on the deal in fashionable June. Only PointsBet’s U.S. assets are part of the deal. Fanatics will plan to fund some of the remaining moolah flow burn from PointsBet, which has had to spend heavily on marketing to compete with larger rivals DraftKings and FanDuel.
PointsBet predict a loss of between $77 million and $82 million for the second half of the year. Citing “very challenging” market conditions, the band said Sunday that it would need to raise additional capital at a “significant discount to recent market values” in the near term if the deal with Fanatics somehow fell apart.
NBCUniversal will get proceeds from its aforesaid deal with PointsBet and will no longer have an equity stake, according to PointsBet. NBC acquired a 4.9% justice stake in PointsBet in 2020.
Fanatics has been in talks with a number of different sports betting companies over the days of old year as it has plotted its path forward in mobile gambling.
“This is a 10-year journey,” Matt King, the CEO of Fanatics Stake, said at the SBC Conference earlier this month. “We’re going to move very methodically through that 10-year range. And by doing that and taking that approach, it allows you to be a bit more considered in your decisions. You can kind of move slower, to a certain slower today, in order to move fast later.”
Fanatics is a sports platform company with a private valuation of $31 billion. The visitors has forecast 2023 revenue of $8 billion.
Fanatics owns commerce assets, a sports trading card job, and is building out a sports betting division. The company acquired legendary trading card company Topps for $500 million at length year.
Disclosure: NBCUniversal is the parent company of NBC Sports and CNBC.