A leader of global iGaming and sports betting operations, DraftKings Inc, has reached an acquisition agreement with US-leading lottery operator Jackpocket for a total consideration of around $750 million. As reported, the agreement anticipates 55% of the consideration to be paid in cash, with the remaining 45% payable in DraftKing’s first-class common stock. According to the press, the purchase price consideration required no capital raise from the sports betting giant.
$750 Million Acquisition:
Under the terms of the agreement, DraftKings will reportedly be entitled to use Jackpocket’s resources to further grow in the US sports wagering and iGaming market. As the leading provider of digital lottery services in the U.S., Jackpocket will invest its proprietary technology, a strong brand, and an outstanding team led by the company’s founder into the new venture set to draw an increased customer pool.
As reported by stock market news and analysis service, StreetInsider, Jason Robins, Co-founder and CEO of DraftKings said: “We are very excited to enter the rapidly growing U.S. digital lottery vertical with our acquisition of Jackpocket. This transaction will create significant value for DraftKings not only by giving our customers another differentiated product to enjoy but also by improving our overall marketing efficiency similar to how our daily fantasy sports database created an advantage for DraftKings in OSB and iGaming.”
According to the report, Peter Sullivan, CEO of Jackpocket added: “Together with DraftKings, we will be able to bring tremendous value to our customer base as we advance our mission to create a more convenient, fun, and responsible way to take part in the lottery. DraftKings’ broad footprint and exceptional mobile products present an opportunity to meaningfully expand the digital lottery vertical, and we could not be more excited to come together with DraftKings.”
Transaction Approval:
As reported by StreetInsider, the agreement was entered on February 11, 2024. The transaction has reportedly been approved by the Board of Directors of DraftKings and Jackpocket and is pending the receipt of required regulatory approvals and closing conditions. The stock market news and analysis service further reports that the transaction is expected to close by the second half of 2024.
Transaction Impact:
According to DraftKings’ press release, the transaction is expected to drive the company’s revenues from $260 million to $340 million in fiscal year 2026. For the same year, the sports betting leader expects to see its Adjusted EBITDA rise from $60 million to $100 million level. The company is reportedly also looking to reach $450 million of incremental revenue and $150 million of incremental Adjusted EBITDA in fiscal year 2028.
$1.23 Billion in Q4 Revenues:
The latest acquisition comes as an extension of the operator’s outstanding financial performance achieved in Q4 2023. Accordingly, the leading American daily fantasy sports contest and sports betting company recently reported Q4 EPS of $0.29, which is $0.21 better than the analyst estimate of $0.08. Revenue for the quarter came in at $1.23 billion versus the consensus estimate of $1.24 billion. The latest acquisition of Jackpocket is set to further strengthen the company’s leading position in the American market.