Daria is an economic student interested in the development of modern technologies. She is eager to know as much as possible about cryptos as she believes they can change our view on finance and the world in general.
The benefits of the deal will include revenue growth, reducing operating expenses and vendor costs, as well as technological advancement.
On Monday, global sports technology and entertainment company DraftKings Inc (NASDAQ: DKNG) announced its decision to acquire online gaming company Golden Nugget Online Gaming Inc (NASDAQ: GNOG). As a result of the $1.56 billion deal, DraftKings will get a broader consumer base for online casino games, especially considering the fact that it will get full access to Golden Nugget Online’s 5 million customers.
DraftKings’ CEO Jason Robins commented:
“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. 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.”
Other benefits of the deal will include revenue growth, reducing operating expenses and vendor costs, as well as technological advancement.
DraftKings and Golden Nugget: Acquisition Details
According to the press release, DraftKings will form a new holding company, New DraftKings, within the deal. There, Golden Nugget shareholders will get a fixed ratio of 0.365 shares.
In addition, DraftKings has also signed a separate commercial deal with Fertitta Entertainment, the parent company of Golden Nugget Online Gaming, as well as the basketball team Houston Rockets owned by billionaire Tilman Fertitta. Currently, Fertitta possesses about 46% of Golden Nugget. However, he agreed to also continue holding DraftKings shares for at least a year after the transaction closes. Besides, Fertitta will join the DraftKings board.
Most importantly, the collaboration will deliver noteworthy strategic benefits. The expected synergies will achieve $300 million at maturity. DraftKings also wants to see revenue uplift from additional cross-promotion opportunities.
The advisors of the deal will be Raine Group, an exclusive financial advisor to DraftKings, Sullivan & Cromwell LLP that is serving as legal counsel to the company. From Golden Nugget Online Gaming’s side, advisors will include its lead financial advisor Jefferies LLC, legal counsel White & Case LLP, and Spectrum Gaming Capital that is acting as financial advisor to the Special Committee of the board of Golden Nugget Online Gaming.
The transaction will close in the first quarter of 2022, it is still waiting for approval from Golden Nugget Online Gaming stockholders.
Following the news, stocks of both the parties surged. DraftKings stock closed at $52.36 yesterday, 1.49% up, with a market cap of $40.96 billion. As for Golden Nugget Online Gaming, its shares soared by 50.77% to close at $18.50 on Monday.