Paddy Power Betfair to acquire FanDuel
The company has confirmed to the London market that it has entered a definitive agreement to acquire US FanDuel.
UK.- In a move that will help Paddy Power Betfair (PPB) target the emerging sports betting market from the United States, the company has announced that it has entered a definitive agreement to acquire DFS giant FanDuel. The transaction is expected to be completed in the third quarter of 2018, subject to regulatory and anti-trust reviews.
The news – confirmed to the London market on Wednesday – establishes that the companies will be merged with PPB’s Betfair US business to target clients for the upcoming sports betting market. The US Supreme Court decided last week to repeal the act that prohibited states from offering sports betting, as it said that it was unconstitutionally taking the right from states to decide for themselves whether they wanted to take advantage of the gambling market or not.
Paddy Power Betfair will contribute with its existing US assets and US$158 million in cash for a 61 per cent share of the combined business, and investors from FanDuel will own the remaining 39 per cent. However, the companies also agreed to take PPB’s ownership to 80 per cent in the next three years and 100 per cent after five.
PPB chief executive Peter Jackson said: “We are excited to add FanDuel to the Group’s portfolio of leading sports brands. This combination creates the industry’s largest online business in the US, with a large sports-focused customer base and an extensive nationwide footprint.”
Matt King, CEO of FanDuel, added: “The combination of brands and team, along with a shared culture and vision for the future, creates the leading gaming destination for US sports fans.” FanDuel is expected to use the money to pay down its existing debt, which stands at US$76 million.
The DFS company possesses 40 per cent of the market in the United States, which translates into seven million registered customers across 40 states in the country. Last year, it generated US$124 million in revenue from 1.3 million actives. PPB said that the brand had been built in the United States on the back of approximately US$400 million cumulative marketing spend to date supported by innovative proprietary technology.
