DraftKings has entered into a definitive agreement that will see the group acquire Golden Nugget Online Gaming in an all-stock transaction that has an implied equity value of approximately $1.56bn.
Following the purchase DraftKings says that it will leverage the Golden Nugget brand, igaming product experience and existing combined database of more than five million customers.
In connection with the acquisition, DraftKings has also entered into a commercial agreement with Fertitta Entertainment, the parent company of the Houston Rockets, Golden Nugget, and Landry’s.
This will include marketing integrations, sponsorship assets with the Houston Rockets, an expanded retail sportsbook presence, and the optionality to obtain market access on favourable terms through certain Golden Nugget casinos.
DraftKings will also become the exclusive daily fantasy sports, sports betting, and igaming partner of the NBA franchise, and intends to open a sportsbook at the Toyota Center, pending state legalisation and regulatory approvals.
“Our acquisition of Golden Nugget Online Gaming, a brand synonymous with igaming and entertainment, will enhance our ability to instantly reach a broader consumer base, including Golden Nugget’s loyal ‘igaming-first’ customers,” said Jason Robins, DraftKings’ CEO and chairman of the board.
“This deal creates meaningful synergies such as increased combined company revenues driven by additional cross-sell opportunities, loyalty integrations and tech-driven product expansion as well as technology optimization and greater marketing efficiencies.
“We look forward to Tilman being an active member of our board and one of our largest shareholders.”
The purchase will deliver expected synergies of $300mm at maturity, says DraftKings, with the company set to deploy a multi-brand strategy which will enhance cross-sell opportunities and drive increased market share and revenue growth.
As part of the transaction, DraftKings will undergo a holding company reorganisation and form a new holding company New DraftKings, which will become the going-forward public company for both DraftKings and GNOG. New DraftKings will be renamed DraftKings Inc. at closing.
The transaction is subject to approval by Golden Nugget Online Gaming stockholders, the receipt of required regulatory approvals and other customary closing conditions and is expected to close in the first quarter of 2022.
The approval of the transaction by Golden Nugget Online Gaming stockholders is expected to be obtained through a written consent to be provided by Tilman Fertitta.
“This transaction will add great value to the shareholders as two market leaders merge into a leading global player in digital sports, entertainment and online gaming,” explained Tilman Fertitta, chairman and CEO of GNOG.
“Leveraging Fertitta Entertainment’s broad entertainment offerings and extensive customer database, coupled with DraftKings’ mammoth network makes this an unbeatable partnership. Together, we can offer value to our combined customer base that is unparalleled.
“We believe that DraftKings is one of the leading players in this burgeoning space and couldn’t be more excited to lock arms with Jason and the DraftKings family across our entire portfolio of assets, including the Houston Rockets, the Golden Nugget casinos and Landry’s vast portfolio of restaurants. This is a strong commercial agreement for both companies.”