On Monday, global sports technology and entertainment company DraftKings Inc (NASDAQ: DKNG) announced the acquisition of online gaming company Golden Nugget Online Gaming Inc (NASDAQ: GNOG). Following the $1.56 billion deal, DraftKings will increase its consumer base for online casino games by getting full access to Golden Nugget Online’s 5 million customers.
Chief Executive Officer, Jason Robins of DraftKings’ 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.“
The deal brings numerous strategic benefits to DraftKings. The company can expect significant revenue growth and a reduction in operating expenses and vendor costs, approximated at $300 million at maturity. The company will also take advantage of some technological assets it will bring on board with the takeover.
As stated in the press release, DraftKings will form a new holding company, New DraftKings, within the deal. Current Golden Nugget shareholders will get a fixed ratio of 0.365 shares.
In addition to the Golden Nugget takeover, 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. Fertitta will be joining the DraftKings board and possesses about 46% of Golden Nugget.
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.
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Source: Igaming
