Deal: Endeavor Buys Sports Gambling Firm OpenBet For $1.2B

Endeavor Group logo

Endeavor Group Holdings (NYSE: EDR), a media and sports conglomerate that owns the Ultimate Fighting Championship (UFC) league, is making a new big acquisition. It’s agreed to buy OpenBet, a British company that makes software for sports gambling operators. 

  • Endeavor will pay $1.2bn to buy OpenBet, split into $1bn in cash and $200mn of stock. It’s buying OpenBet from Scientific Games Corporation, a publicly-traded gambling company that bought it in 2017 as part of its $630mn acquisition of NYX Gaming.
  • Divesting an asset bought as part of a $630mn deal in 2017 for $1.2bn four years later represents a very good return on investment for Scientific Games.
The acquisition is strategic to strengthen Endeavor’s position in the sports betting ecosystem. Right now, the company’s main business in that area is IMG Arena, a provider of live-streamed sports video and data feeds to sportsbook operators around the globe. With OpenBet, the business will be complemented with software tools used by sportsbook operators to facilitate gambling.
  • OpenBet’s software tools are used by sportsbook operators to facilitate trading, pricing, risk management, and other processes needed to enable gambling. Its major customers include the likes of DraftKings, FanDuel, Ladbrokes, and William Hill.
Right now, there is a dealmaking uptick in the gambling space. It was most recently amplified by DraftKings offering $22bn to buy Entain Group, a British sports betting giant. Before then in August, DraftKings also agreed to buy Golden Nugget Online Gaming, an American online casino company, for $1.6bn.

The latest deal in the gambling industry, Endeavor buying OpenBet, is expected to be completed in the second quarter of 2022.
  • Endeavor is a conglomerate with a plethora of entertainment and sports businesses. Its main divisions include the UFC mixed martial arts league, Hollywood talent agency WME, and sports events giant IMG. 
  • Endeavor went public this April with an IPO that raised over $500mn. It made $3.5bn in revenue in 2020.

                                            

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