Betway parent company to float via $5.1bn US SPAC merger

Super Group, the parent company behind Betway, has agreed a $5.1bn (£3.6bn) SPAC merger with Sports Entertainment Acquisition Corporation (SEAH).

The arrangement will see the Super Group business go public, valued at $4.75bn (£3.4bn).

The combined group will immediately receive a cash injection of $450m (£323.2m) in funds which are currently held in trust.

Under the terms of the deal, Super Group’s existing shareholders will hold 88% of the shares in the new entity on completion, which will have $200m in cash on its balance sheet and no debt.

Its shares will trade under the name Super Group on the New York Stock Exchange at the completion of the deal.

EGR understands 70% of Super Group equity shareholders have agreed not to sell any of their shares in the business and will roll these equity positions into the new public company.

The deal is expected to close in H2 2021 and will be voted on by SEAH shareholders.

In a separate arrangement targeting the US market, Super Group has agreed a deal to acquire Digital Gaming Corporation, which will be given the exclusive rights to operate the Betway brand in the US.

Financial terms of this deal were not disclosed, although the arrangement builds on the existing licensing agreement between the two businesses as Betway gains market access to 10 US states.

Former NFL executive vice president Eric Grubman, who currently serves as SEAH group chairman, will retain this role in the combined business, while former NHL COO John Collins, who served as CEO of SEAH, will join the board of directors.

Addressing the long-term potential of the deal, Super Group CEO Neal Menashe said: “Becoming a public company will give us the tools to continue to grow our leading product and technology offering and deliver a strengthened brand-driven marketing strategy.

“This listing will position us strongly to capitalise on the significant global growth opportunities ahead ‒ including in the US market ‒ enabling us to further expand our robust, loyal and engaged customer base.

“In Eric and John, we have found the perfect partners with expertise across sports, entertainment and public markets to help us navigate our next phase of growth,” Menashe added.

Assessing the $5.1bn SPAC merger, Regulus Partners analyst Paul Leyland said: “Super Group has a proven multi-market growth model and has recently shifted into very strong cash generation.

“The majority of Super Group’s larger markets are getting more complex, more competitive and could have some legislative stings in the tail.

“The unwinding of Covid-19 policy impacts is also likely to put pressure on some of the operating margin benefits seen recently by a number of operators (additional fixtures, strong sports margins, higher consumer interest, less advertising).

“However, a broad portfolio and strong in-house capability should allow Super Group to weather these issues.

“Perhaps most reassuringly from a resilience perspective, after a swathe of M&A-led or projection-led scale, the latest gambling business to go public is a highly successful organic growth business with a broad revenue base and proven cash generation,” Leyland added.

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