Penn National Gaming, a major operator of American casinos and racetracks, ala betting, has made a big new acquisition. It’s acquiring theScore, a Canadian sports betting content company that’s traded on the Nasdaq and Toronto Stock Exchanges.

• Penn National will pay $2bn in cash and stock to buy Score Media and Gaming Inc, the parent company of theScore. The cash and stock portions of the purchase are split into equal halves of $1bn. 

• Acquiring theScore is a major strategic play for Penn National to deepen its interest in the sports betting business by the way of content. Before now, the company did so by purchasing 36% of Barstool Sports, a major sports content provider, for about $160mn last year.

• Before 2020, Penn National was mostly focused on operating casinos and racetracks as its business, but last year picked up interest in sports betting as a growth driver. Now spending $2bn on a company in that sector signifies its interest is really high.

• theScore provides sports betting content via websites and a collection of mobile apps. It mostly makes money from sponsorships and digital ads served on its media properties. 

• theScore brought in the equivalent of about $17mn in its most recent fiscal year ended August 2020. Penn National is paying 118x times that to buy the company, a very high acquisition multiple by most standards.  

• theScore was spun out of a previous parent firm named Score Media which was sold to Canadian cable giant Rogers Communications in 2012. It was spun out that year as an unwanted asset by Rogers into its own separate company. Now, the tides have turned, as theScore is selling for $2bn, compared to the $167mn its former parent firm sold for.

• This is a pace-setting deal for Canadian digital media companies, as you don’t often see such big acquisitions coming from the country.

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