Sports data provider Genius Sports Group agreed this week to go public in a merger of SPAC with dMY Technology Group II valued at $ 1.5 billion.
The transaction is subject to a vote by dMY II shareholders, as well as other customary closing conditions and is expected to close in the first quarter of 2021.
Based in London, Genius Sports obtains data from sporting events taking place around the world and provides it to sports betting operators. The company have official data rights associations with some of the biggest sports leagues in the world, including the English Premier League, FIFA, FIBA, NBA, NCAA, NASCAR and more.
Genius Sports says that it provides data on over 240,000 events each year and is the official data provider for over 170,000 of these events.
Under the terms of the Genius Sports and dMY II merger agreement, the shareholders of the two companies will exchange their shares for shares of a new combined company – NewCo – which will be listed on the New York Stock Exchange. As mentioned above, the combined entity will be valued at approximately $ 1.5 billion or eight times Genius Sports’ projected revenue of $ 190 million.
The newly formed company is projected to have approximately $ 150 million of unrestricted cash and a substantially debt-free balance sheet after the close of the combination.
The latest SPAC merger
dMY II is a recently formed Special Purpose or Blank Check Acquisition (SPAC) company led by former EMC Corp. Executive Harry You and former Glu Mobile Inc. CEO Niccolo De Masi. It is understood that the firm has held discussions with investors about the raising more than $ 300 million in new shares to finance its merger with Genius Sports.
SPACs like dMY II raise money by going public and then look for a company to acquire and invest the funds they have raised.
The Genius Sports SPAC merger is the latest deal of its kind announced by a gambling company in recent months. Another blank check company led by Mr. De Masi and Mr. You, dMY Technology Group, announced in July a merger with the US online sports betting and casino operator. Rush Street Interactive.
Further, DraftKings closed this spring a three-way combination with SPAC Diamond Eagle Acquisition Corp. and gaming technology provider SBTech and blank check firm Landcadia II and Tilman Fertitta-owned online gaming company Golden Nugget Online Gaming , Inc., announced a similar deal in June.
SPACs have made big moves in recent years and particularly in 2020 with the participation of several renowned players from different industries. Mergers with blank checking companies have become one of the best investment options because they give company management more control over pricing and are less expensive, particularly at a time of severe economic disruption caused by the Covid-19 pandemic.
It should also be noted that going public through traditional IPOs takes much longer – from several months to more than a year – whereas SPAC mergers can only take a couple of weeks to complete.