By Krystal Hu and Niket Nishant<\/p>\n
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.<\/p>\n
Endeavor, whose shares were up nearly 10% in extended trading, said the acquisition will strengthen its position in the sports betting industry.<\/p>\n
The company said it plans to combine OpenBet, a sportsbook and gaming software, with its existing sports betting business IMG ARENA.<\/p>\n
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.<\/p>\n
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.<\/p>\n
Demand for online betting has boomed during the pandemic as customers took to playing from home when casinos and betting shops were off-limits.<\/p>\n
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 companies said.<\/p>\n
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.<\/p>\n
“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.<\/p>\n
Oakvale Capital and Macquarie Capital advised Scientific<\/a> 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 Jacob-Phillips)<\/p>\n<\/div>\n <\/p>\n