Scientific Games Corporation has entered into a definitive agreement to sell its sports betting business, OpenBet, to global sports and entertainment firm Endeavor Group Holdings Inc in a cash and stock transaction worth $1.2 bn.
Under the terms of the agreement, Scientific Games will receive $1bn in cash and $200m in Endeavor Class A common stock. The transaction is expected to close in the second quarter of 2022, subject to applicable regulatory approvals and customary closing conditions.
OpenBet, one of the world’s leading online sports betting technology companies, has over 75 global customers, including 24 sports books across 12 US states and a claimed 100% uptime record across major sporting events.
President and CEO Barry Cottle described the transaction as the culmination of a thorough process to divest OpenBet to maximize shareholder value and rapidly advance SG’s ambitions to become the leading cross-platform global game company.
“The transaction is a significant milestone towards optimizing our portfolio and de-levering the balance sheet to enhance our financial flexibility,” he said. “It will position us to invest both organically and inorganically in key growth areas, particularly in content and digital markets.
“We are delivering on our promises and executing on our strategy to transform our company and unlock significant value for employees, customers and shareholders.”
Jordan Levin, CE of Scientific Games’ Digital business, added: “We believe Endeavor will enable us to build on our exceptional track record of innovation and reliability and unlock even greater value for our customers and employees.
“Endeavor’s deep industry relationships and global reach make them the ideal partner. Together, these companies will be well positioned to capitalize on emerging trends to deliver even more innovative and tailored solutions to customers as we define the future of sports betting entertainment.”
Endeavor CEO Ariel Emanuel stated: “OpenBet has built an incredible sports betting suite anchored in its best-in-class betting engine and now including expanded content, services and products for sports books and fans.
“This capability set is the ideal complement to our IMG ARENA sports betting business, which works directly with sports rights holders. We look forward to growing these businesses together to capitalize on the strong secular tailwinds in the sports betting ecosystem.”
In joining the Endeavor stable, OpenBet will feature alongside some of the biggest names in sports and entertainment including entertainment agency WME; sports, fashion, events and media company IMG; and premier mixed martial arts organization UFC.