Online betting company DraftKings is merging with two other companies and going public, according to a report by the Boston Business Journal.
The company is going to merge with Diamond Eagle Acquisition and SBTech. Diamond Eagle will change its name to DraftKings Inc.
According to CNBC, Diamond Eagle is a special purpose acquisition company that is already publicly traded, so the merger will allow DraftKings to become public without going through the typical initial public offering (IPO) process.
Jason Robins, the co-founder and CEO of DraftKings, is going to run the new company, which will be incorporated in Nevada and keep its headquarters in Boston. The company currently has offices in New York, New Jersey, San Francisco and Las Vegas.
The new deal with the other companies gives DraftKings a valuation of $3.3 billion, and the new company will have $500 million in cash at the end of the transaction, scheduled for 2020.
The company said the deal with DraftKings turns it into the “only vertically-integrated pure-play sports betting and online gaming company,” the company said in a release.
“The combination of DraftKings’ leading and trusted brand, deep focus on customer experience and data science expertise and SBTech’s highly innovative and proven technology platform creates a vertically-integrated powerhouse,” Robins said. “I look forward to building significantly upon our goals of continuing our state-by-state rollout and creating the most entertaining and engaging customer experiences for sports fans globally.”
Gavin Isaacs, the chairman of SBTech, said the deal combines “tech native companies.”
“SBTech will maintain its core business and continue its B2B focus,” he said. “We are excited about the opportunity to join a company with a similar innovation DNA and create a unique and differentiated player in global sports betting and online gaming.”
In Massachusetts, there haven’t been many IPOs related to technology, although Chewy, a pet food and supply company, went public in June. Diamond Eagle is being advised by Goldman Sachs, and Raine Group is advising DraftKings.
DraftKings was founded in 2011.
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