The deal includes a commercial agreement with Fertitta Entertainment and professional basketball team Houston Rockets
Golden Nugget Online Gaming to be acquired by DraftKings in an all-stock deal. (Credit: Gerd Altmann from Pixabay)
DraftKings, a US-based digital sports entertainment and gaming company, has agreed to acquire Golden Nugget Online Gaming in an all-stock deal worth around $1.56bn.
Golden Nugget Online Gaming is a publicly listed online gaming company based in Texas.
DraftKings said that the acquisition will enable it to tap Golden Nugget’s iGaming product experience along with its existing combined database of over five million customers.
DraftKings CEO and board chairman Jason Robins said: “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 optimisation and greater marketing efficiencies.”
As part of the deal, DraftKings will have a holding company reorganisation. It will create a new holding company called New DraftKings, which will be the going-forward public company for the two firms.
At closing, New DraftKings will be renamed DraftKings.
In connection with the deal, DraftKings has forged a commercial agreement with Fertitta Entertainment, the parent company of the American professional basketball team Houston Rockets, casino operator Golden Nugget, and hospitality company Landry’s.
The agreement will cover marketing integrations, sponsorship assets with the Houston Rockets, an enlarged retail sportsbook presence, and the option to get market access on favourable terms through some Golden Nugget casinos.
As per the terms of the merger deal, Golden Nugget Online Gaming’s shareholders will get 0.365 shares of New DraftKings for each share of Golden Nugget Online Gaming.
Golden Nugget Online Gaming chairman and CEO Tilman Fertitta said: “This transaction will add great value to the shareholders as two market leaders merge into a leading global player in digital sports, entertainment and online gaming.
“Leveraging Fertitta Entertainment’s broad entertainment offerings and extensive customer database, coupled with DraftKings’ mammoth network makes this an unbeatable partnership. Together, we can offer value to our combined customer base that is unparalleled.”
Tilman Fertitta, who owns a stake of around 46% in Golden Nugget Online Gaming, has agreed to hold the DraftKings’ shares to be issued in the merger for a minimum of one year.
The deal, which is subject to approval from Golden Nugget Online Gaming’s shareholders, regulatory approvals, and other customary closing conditions, is anticipated to close in Q1 2022.