DraftKings completes SBTech buyout as senior team restructures
SBTech CFO Shay Berka to become chief international officer as combined group starts trading publicly under DKNG ticker
DraftKings has completed its $3.3bn three-way combination with SBTech and Diamond Eagle Acquisition Corp (DEAC) and is now trading as a Nasdaq-listed PLC under the ticker symbol DKNG.
EGR understands that as part of the merger, SBTech CEO Richard Carter will not be involved in the day-to-day running of the business but will act as an advisor to the combined group, while CFO Shay Berka will take on the new role of chief international officer.
SBTech will continue to operate as a B2B business within the DraftKings group, with Berka to oversee the delivery of products outside of North America. SBTech chief development officer Andrew Cochrane will become SVP commercial development for the US market, reporting to the US organisation from New York.
SBTech chief strategy officer Ian Bradley will also be handed a senior management role.
DraftKings CEO Jason Robins and his current senior team will remain in place, with Robins also serving as chairman of the board for the group.
Robins said in a statement this morning: “Today marks another milestone for DraftKings and the future of digital sports entertainment and gaming in America.
“By bringing together our leading consumer brand, data science expertise and industry-leading products with SBTech’s proven technology platform, we will accelerate our innovation, growth and scale,” he added.
“I am confident that the new DraftKings will progress our goal of offering the best, most innovative sports and gaming products to our customers.”
Robins told Yahoo Finance the inclusion of DEAC in the deal provided the firm with an additional $500m in funding.
The merger was approved yesterday by DEAC stockholders.
DEAC shifted its terms in the deal earlier in the month to cover potential cyber-attack compensation costs, after SBTech was hit by a ransomware attack.
On the buy-out, UK analysts Regulus Partners said: “DraftKings was highly exposed without a scalable platform and almost complete reliance on a third party for an existential product (not just in terms of winning betting market share – failure to do so would risk crumbling the DFS base without the upsell).
“The risk/reward might be extreme in the case of DraftKings – SBTech, but Covid-19 is also likely highlighting critical exposures within the supply chain to a number of operators.
“When most of gambling is switched off, this is merely an important observation, but as things are switched back on again the levels of disruption, the requirement to prioritise and especially the need to innovate will be profound, in our view.”