WASHINGTON (dpa-AFX) - Online gaming giant DraftKings Inc. has agreed to a business combination that will make it a publicly traded company.
The digital sports entertainment and gaming company known for its daily fantasy sports and mobile sports betting platforms, said Monday it has agreed to a business combination with Diamond Eagle Acquisition Corp., a publicly traded special purpose acquisition company, and SBTech, a provider of sports betting and gaming technologies.
The combined company will become the only vertically-integrated pure-play sports betting and online gaming company based in the U.S. The transaction is expected to close in the first half of 2020.
As part of the deal, Diamond Eagle plans to change its name to DraftKings Inc., reincorporate in Nevada and remain listed on Nasdaq under a new ticker symbol. The company's current stock ticker is 'DEAC.'
'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,' said Jason Robins, co-founder and CEO of DraftKings.
The combined company is expected to have an equity market capitalization at closing of about $3.3 billion and have more than $500 million of unrestricted cash on the balance sheet.
The new DraftKings will be led by Jason Robins as well as DraftKings' management team, including co-founders Paul Liberman and Matt Kalish.
The SBTech management team with its trading and risk management experience will also be integrated into the organization.
Institutional investors have committed to invest $304 million in the Class A common stock of the combined company, that will close at the same time the merger is completed. The institutional investors include funds managed by Capital Research and Management Co., Wellington Management Co. and Franklin Templeton.
DraftKings currently offers mobile and online sports betting in four states - Indiana, New Jersey, Pennsylvania and West Virginia - and retail locations in Iowa, Mississippi, New Jersey and New York.
DraftKings' daily fantasy sports product is available in 43 states and 8 international markets, including Australia, Canada and the U.K.
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