Sept 27 (Reuters) - Endeavor Group Holdings Inc, the
owner of the Ultimate Fighting Championship, will acquire sports
betting business OpenBet from Scientific Games Corp for
$1.2 billion in cash and stock, the companies said on Monday.
Endeavor, whose shares were up nearly 10% in extended
trading, said the acquisition will strengthen its position in
the sports betting industry.
The company said it plans to combine OpenBet, a sportsbook
and gaming software, with its existing sports betting business
The deal comes at a time when the online gambling space has
been witnessing frenetic dealmaking as more states in the United
States are expected to legalize the industry.
Last week, British gambling firm Entain said it had
received a takeover proposal from U.S. fantasy sports betting
company DraftKings, valuing it at $22.4 billion.
Demand for online betting has boomed during the pandemic as
customers took to playing from home when casinos and betting
shops were off-limits.
The OpenBet deal, which is expected to close in the second
quarter of 2022, will be financed through $1 billion in cash and
$200 million worth of Endeavor's Class A common stock, the
Las Vegas-based Scientific Games, known as a major slot
machine maker, had previously announced its plan to divest its
lottery and sports-betting businesses to deleverage and pivot to
a gaming and digital content provider.
"Through the transaction, we would be able to get the
ability to have a healthy balance sheet and dry powder to really
lean in on games," Scientific Games Chief Executive Officer
Barry Cottle said in an interview with Reuters on Monday.
Oakvale Capital and Macquarie Capital advised Scientific
Games on the deal, while Raine Group acted as the financial
adviser to Endeavor.
(Reporting by Niket Nishant in Bengaluru and Krystal Hu in New
York; Editing by Shounak Dasgupta, Vinay Dwivedi and Sherry