Paddy Power Betfair acquires fantasy sports platform FanDuel
Paddy Power Betfair has this week announced that is has acquired the US fantasy sports betting platform FanDuel, with the two set to merge their US businesses into a new entity.
Paddy Power Betfair will merge the US division of Betfair with FanDuel to form a new entity in the newly opened US sports betting market.
Under the terms of the agreement, Paddy Power Betfair will own 61% of the group, contribute US assets and offer up $158m in cash to help pay off FanDuel’s existing debt. A clause in the deal will allow Paddy Power Betfair to increase their ownership share to 80% after three years and 100% after five years if desired.
Operational control of the business will fall to Paddy Power Betfair. Furthermore, the group will be responsible for selecting and appointing a CEO and most members of the Board of Directors.
The merger will combine different elements of each business. FanDuel’s technology and established brand and user-base in the US will be combined with Betfair’s existing horse racing betting network, media operation and casinos in New Jersey.
New products, a bigger workforce, and other growth opportunities will be the initial focus of investment, while goals will be to drive revenue and integrate the digital products of each group.
The transaction requires regulatory approval and is hoped to be completed by Q3 2018.
Speaking about the deal, Peter Jackson, the CEO of Paddy Power Betfair, said:
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.– Peter Jackson, CEO Paddy Power Betfair.
The places the group in a strong position to capitalise on the newly opened US sports betting market. FanDuel has over 7m registered users and an almost 40% share of the fantasy sports betting market in the US.