Rush Street Interactive latest to sign SPAC deal worth $1.78bn
Operator to merge with NY Stock Exchange-listed dMY Technology in $390m IPO deal
Rush Street Interactive (RSI) has followed in the footsteps of DraftKings and Golden Nugget by merging with a special purpose acquisition company (SPAC) to form a combined public group worth $1.78bn.
The operator has been valued at 5.4x its forecasted 2021 FY revenue of $320m having teamed up with SPAC dMY Technology.
As part of the deal, dMY will inject $230m in cash with an additional $160m in private investment from Fidelity Management at $10 per share in dMY common stock.
The capital will fund RSI’s public offering on the New York Stock Exchange, as well as its growth in the US and Latam, while supporting increased marketing for the brand.
Current RSI chairman Neil Bluhm will maintain his position within the new group, which will change its name to Rush Street Interactive INC, with the stock exchange ticker symbol “RSI”.
Fellow RSI founders and existing CEO and president Greg Carlin and Richard Schwartz will also maintain their positions, while dMY chairman Harry You and CEO Niccolo de Masi join the board.
Both have longstanding experience in technology, having worked at Oracle and mobile game publisher Glu Mobile.
The combined group expects to grow its valuation to $2bn based on RSI’s expected YOY revenue growth of $262.7m in 2020 and a further $90m in 2021.
According to 2020 figures released by the operator, it expects a positive EBITDA of $9m for the first time since launching in New Jersey and Pennsylvania, compared to losses of $9.4m last year and $7.9m in 2019.
On a call with investors, RSI outlined the strengths of its in-house proprietary igaming platform, including plans to launch a new app in H2 2020.
The firm partners with Kambi on sports betting.
Golden Nugget is in the process of carving out a similar deal with Tilman Fertitta-sponsored SPAC Landcadia II to fund its expansion into new states and to grow its sportsbook.