FansUnite enters definitive agreement to sell Betting Hero business for $37.5m
US-facing affiliate to be 60% owned by co-founders with GeoComply taking a 40% stake as a minority investor as part of multi-million-dollar deal
FansUnite Entertainment has agreed to sell its FansUS subsidiary, which encompasses affiliate Betting Hero, for $37.5m to the group’s founders and GeoComply.
FansUS is expected to be sold to Hero Group, which is spearheaded by Betting Hero’s co-founders, Jai Maw and Jeremy Jakar, after the firm’s parent company entered a definitive agreement to sell.
The transaction’s close is anticipated to be completed around August 15, 2024, at which time Maw and Jakary will be in control of 60% of the business, while the remaining 40% of shares will be in the possession of GeoComply.
Betting Hero has been operational for six years and is active in more than 20 US states. The group is made up of three arms: Betting Hero Activation, Betting Hero Research, and Betting Hero Digital.
The firm’s activation division has converted more than 500,000 users to online operators.
GeoComply said it intended to “work in tandem [with Betting Hero] to develop real-time solutions that will make the online sportsbook and igaming activation process as seamless as ever.”
As per the terms of the stock purchase agreement, FansUnite Entertainment will distribute 90% of the net proceeds, which is estimated to be around the $20m mark, to the company’s shareholders.
In terms of the deal’s format, $30.6m of the overall fee is to be paid in cash following the closing of the transaction, with the remaining $6.9m to be settled via the cancellation of demand note issued to Maw and Jakary.
FansUnite will also retain C$500,000 to “explore new business opportunities for the economic benefit of its shareholders.”
Additionally, FansUnite shareholders will receive a distribution of C$0.065 to C$0.075 per share, based on the USD and CAD exchange rate provided by the Bank of Canada on June 26, 2024.
The deal was approved unanimously by the FansUnite board and its special committee, which is comprised of board members James Keane and Quinton Singleton.
BDO Global worked alongside the special committee to provide a formal valuation of the business, and deemed FansUS to be worth anywhere between $31m and $37m.
In turn, all members of the company’s executive team have entered into voting agreements with Hero Group, citing the sale as the best route for maximum shareholder value.
Scott Burton, FansUnite Entertainment CEO, said: “After a long and thorough strategic evaluation of our business, we’ve received a substantial cash offer for our primary remaining asset.
“It not only reflects high market multiples when compared to similar transactions but also a substantial premium to our current share price. After extensive deliberation with our board and advisors, we believe it’s in the best interest to recommend the sale and allow the shareholders to vote on a return of capital.”
Anna Sainsbury, GeoComply CEO, added: “Jai and Jeremy have built a tremendous business with a laser-like vision to support their customers’ mission for the best possible user experience through the signup process.
“At GeoComply, we share that vision and are delighted, through this intended investment, to help Betting Hero further their efforts and deploy more resources and focus into serving our customers and their patrons throughout North America.”