DraftKings Bids to Purchase Poinstbet for $195M

The agreement states that Kambi would continue to give LeoVegas Group access to its sportsbook technology and services in addition to its AI-powered trading and Bet Builder tool.

DraftKings Bids to Purchase Poinstbet for $195M

DraftKings, the largest US sportsbook, has made an unexpected offer to purchase PointsBet's US business, which it values at $195 million.

Many people had assumed that Fanatics' acquisition of PointsBet's US business was a "done deal," but DraftKings' offer is 30% higher than what Fanatics is providing.

Should the sale go through, it will be an all-cash transaction and be subject to the restrictions outlined in DraftKings' request.

A "Timeline to Signing a Definitive Agreement," which states that DraftKings wants the deal completed in three weeks, and a "Required Approvals and Timeline to Closing," which outlines DraftKings' expectation that regulatory approval will not be a problem and that the deal will close more quickly than any deal with Fanatics, are two examples of such conditions.

“We believe DraftKings is uniquely positioned to submit this superior proposal due to our scale and corresponding ability to generate meaningful synergies from the acquisition.”

Meanwhile, Jason Park, DraftKings’ CFO, added: “We expect this transaction to increase our adjusted EBITDA potential in 2025 and beyond and not impact our expectations of achieving positive adjusted EBITDA in 2024.

“We are excited about the potential synergies available by acquiring PointsBet’s US business, including offering our customers interesting new bet types and accelerating our roadmap of bringing in-house more of our mobile sports betting technology.”

PointsBet, the seventh-largest online sportsbook in the US market, initiated a strategic assessment of its US operations in April, essentially putting it up for sale. Many believed Fanatics' $150 million offer in mid-May would result in a settlement, but DraftKings' $45 million additional offer has put a wrench in the works.

The action might be seen as an attempt by DraftKings to keep up with FanDuel and prevent the market entry of Fanatics, a major sports apparel company. Given that both parties have the financial resources to raise their proposals, it will be intriguing to watch how Fanatics responds to DraftKings' offer. It appears that DraftKings has now sparked what might turn into an expensive bidding war.