Paddy Power Betfair to fold FanDuel into US business
London-listed operator hails brand strength and database of combined group
Paddy Power Betfair has announced a definitive agreement to fold DFS firm FanDuel into its existing US business, with PPB taking ownership of 61% of the combined group.
Under the agreement, PPB will contribute its existing US assets along with $158m of cash which will be used to pay down FanDuel’s debt (net debt of $76m at 31 March 2018) and fund the combined business’ operations.
All material FanDuel investors are rolling their investments into the combined business, and will own the remaining 39%.
PPB said a statement: “The transaction strengthens the Group’s opportunity to target the prospective US sports betting market through the addition of a strong brand, large existing customer base and talented team.
“The scale of the combined business also means it is well positioned in discussions with providers of market access for sports betting.”
Why does PPB want FanDuel? Top left number is important pic.twitter.com/TBzovoDejR
— EGR Global (@EGRIntel) May 23, 2018
Peter Jackson, CEO of PPB, added: “We are excited to add FanDuel to the Group’s portfolio of leading sports brands.
“This combination creates the industry’s largest online business in the US, with a large sports-focused customer base and an extensive nationwide footprint.
“The Group has leading sports betting operating capabilities globally and strong operations on the ground in the US. Together with our substantial financial firepower, we believe we are now well placed to target the prospective US sports betting opportunity.”
The deal also includes a mechanism to take PPB’s ownership of the business to 80% after three years and 100% after five years.
FanDuel has over 40% market share of the US daily fantasy sports market, with 7m registered customers across 40 states. In 2017, it had revenue of $124m and 1.3m active customers.
“We are excited to bring these two great businesses together,” said Matt King, CEO of FanDuel.
“The combination of brands and team, along with a shared culture and vision for the future, creates the leading gaming destination for US sports fans.”