The Fanatics logo is seen on a dugout wall ahead of a game between the Pittsburgh Pirates and the Milwaukee Brewers at PNC Park on July 3, 2022 in Pittsburgh, Pennsylvania. (Photo by Justin Burr/Getty Images)
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Fanatics has agreed to buy PointsBet’s US operations, marking the sports giant’s first major leap into US sports betting.
The transaction is valued at approximately $150 million in cash. The companies announced the deal late Sunday, shortly after CNBC reported the deal had been reached.
“Fanatics and PointsBet are pleased to have entered into an agreement with Fanatics Betting and Gaming to acquire PointsBet’s US operations,” company says in a joint statement. “While there are still several steps in the process of completing the acquisition, both parties are confident in the outcome. Fanatics Betting and Gaming and PointsBet will provide further details and updates on the proposed transaction in the coming weeks.”
The deal will give Fanatics access to at least 15 states, according to people familiar with the deal. The person spoke on condition of anonymity because the discussions are private. Fanatics expects to be in most of the states where PointsBet operates by the start of the NFL season, one of the people said.
PointsBet shares are traded in Australia and a shareholder vote on the deal is expected in late June. Only PointsBet’s US assets are part of the deal. Fanatics will plan to fund some of the remaining cash flow burn of PointsBet, which has had to spend heavily on marketing to compete with larger rivals draft king Duel with fans.
PointsBet forecasts a loss of $77 million to $82 million for the second half of the year. The company said Sunday that, citing “very challenging” market conditions, it would need to raise additional capital in the near term at a “substantial discount to recent market prices” if the deal with Fanatics somehow fell apart.
According to PointsBet, NBCUniversal will receive proceeds from the previous transaction with PointsBet and will no longer have an equity interest. NBC acquired a 4.9% stake in PointsBet in 2020.
Fanatics has been in talks with a number of different sportsbooks over the past year as it maps out its path in the mobile betting space.
“It’s been a 10-year journey,” Fanatics Betting CEO Matt King told an SBC conference earlier this month. “In this 10-year journey, we’re going to move forward very methodically. By doing this and taking this approach, it allows you to think a little bit more about your decisions. You can go a little slower today and move faster for later. .”
Fanatics is a sports platform company with a private valuation of $31 billion. The company forecasts revenue of $8 billion in 2023.
Fanatics owns commercial properties, a sports trading card business, and is building a sports betting division. Company acquires legendary trading card company Topps $500 million last year.
Disclosure: NBCUniversal is the parent company of NBC Sports and CNBC.