Fanatics secures shareholder approval for PointsBet’s US assets acquisition
Fanatics, the renowned sports merchandising company, is set to finalize its acquisition of PointsBet’s US assets after receiving approval from PointsBet shareholders. The vote took place during an extraordinary general meeting on June 30, where an overwhelming 98.2% of PointsBet shareholders voted in favour of the deal.
Strengthening the balance
As part of the agreement, Fanatics plans to distribute capital to shareholders, offering a payout of between $1.39 and $1.44 per share. The first installment of $1 will be disbursed in mid-September, followed by the second payment after the acquisition’s completion. Despite the sale of its US business, PointsBet shareholders will retain a stake in the operator’s domestic Australian and growing Canadian businesses while remaining listed on the ASX.
PointsBet has made the strategic decision to sell its US business in order to bolster its balance sheet and address financial uncertainty. According to Chairman Brett Paton, the US market is highly challenging for challenger brands, as it would require significant capital and additional capital raises to sustain operations. The market domination of major players such as FanDuel and DraftKings has created significant obstacles for companies like PointsBet. This transaction is a proactive step towards addressing these challenges.
Despite achieving a market share of over 1% in gross gaming revenue (GGR), PointsBet faced challenges due to the dominant presence of FanDuel and DraftKings in the market. This duopoly hindered other brands from making a significant impact. Paton recognized the advantages enjoyed by these major players, which constrained PointsBet’s potential to grow sustainably within the current market dynamics.
Part of strategy
Fanatics’ decision to acquire PointsBet’s US business is part of its strategy to enter the US online sports betting market swiftly. Known for its sports merchandise and a vast customer database of 90 million, Fanatics has ventured into the betting industry through Fanatics Betting and Gaming. The company aims to challenge industry leaders like FanDuel and DraftKings with a stronger balance sheet and ambitious market aspirations.
Fanatics has made an important acquisition that grants them access to vital technology and markets. Once regulatory approval is obtained, Fanatics will gain control of PointsBet’s presence in 15 US sports betting jurisdictions. This deal is seen as a turning point for Fanatics, as it will help to expedite their expansion into the legal online sports betting, advance deposit wagering, and iGaming markets in the US. PointsBet has a highly respected proprietary sports betting technology, which is powered by Banach, that will be a valuable addition to Fanatics’ product offerings.
Fanatics raised their initial bid by 50%, increasing the offer from $150 million to $225 million, due to competition from DraftKings and their superior bid. This acquisition is expected to be a major achievement for Fanatics Betting and Gaming, as they work towards realizing their distinctive vision in the American betting market.