Paddy Power Betfair has agreed a deal to acquire fantasy sports site FanDuel, in a strategic move which will see the UK-based bookmaker aim to make moves within the post-PASPA market in the US.
The group is to combine its Betfair brand in the US with New York-based fantasy sports firm while also contributing US$158m in cash, from which FanDuel will pay down $76m of existing debt.
Upon completion – expected in Q3 2018 – Paddy Power Betfair will own 61 per cent of the combined business, while existing FanDuel investors own 39 per cent. The group’s ownership will increase to 80 per cent after three years and 100 per cent after five, consisting of call and put options at prevailing market valuations.
Paddy Power Betfair believes the deal strengthens the opportunity to target the prospective US sports betting market, with FanDuel boasting a 40 per cent share of the domestic daily fantasy sports market and with 7m registered customers across 40 states. In 2017, it had a revenue of $124m and 1.3m active customers.
“This combination creates the industry's largest online business in the US, with a large sports-focused customer base and an extensive nationwide footprint,” said Peter Jackson, CEO of Paddy Power Betfair. “The Group has leading sports betting operating capabilities globally and strong operations on the ground in the US. Together with our substantial financial firepower, we believe we are now well placed to target the prospective US sports betting opportunity."
Matt King, CEO of FanDuel, said: "We are excited to bring these two great businesses together. The combination of brands and team, along with a shared culture and vision for the future, creates the leading gaming destination for US sports fans."
