UFC Parent Endeavor Acquires OpenBet: What Investors Should Know

The surge of sports betting acquisitions continues with the parent company of several sports leagues investing in the growing sports betting vertical.

What Happened: Endeavor Group Holdings Inc (NYSE: EDR) announced the acquisition of OpenBet for $1.2 billion, consisting of $1 billion in cash and $200 million in EDR shares.

The acquisition will see Endeavor acquire the betting brand owned by Scientific Games Corp (NASDAQ: SGMS), which announced in June it was looking for a buyer. 

“The combination of OpenBet and IMG Arena will create a unique end-to-end solution, delivering official data and video streams, premium content, cutting-edge mobile products and best-in-class betting technology solutions to leagues, federations and sportsbooks worldwide,” Endeavor said in a press release.

The transaction is expected to close in the second quarter of 2022.

Related Link: UFC, WME Parent Endeavor IPO: What Investors Need To Know 

Why It’s Important: OpenBet serves licensed customers and regulated gaming markets. The company counts Draftkings Inc (NASDAQ: DKNG), FanDuel, WynnBet, SkyBet, Ladbrokes Coral and William Hill as customers.

The company specializes in “betting engine technology” and processed over three billion bets in 2020.

“The acquisition will complement Endeavor’s position within the sports betting ecosystem,” the company said in a press release.

Endeavor’s IMG Arena currently works with 470 sportsbook brands to deliver live streaming video and data feeds.

The deal could diversify Endeavor Group further in the sports ecosystem and help it monetize its valuable assets.

Endeavor owns the UFC, Professional Bull Riding and Euroleague Basketball brands. The company also sells media rights on behalf of clients such as the NFL, IOC, NHL, UFC and PBR.

The company owns, operates and represents over 800 events annually.

Endeavor could look to package media rights, sports betting data and other items together in deals.

Price Action: SGMS shares are up 2.05% to $82.95 and EDR shares are up 0.33% to $27.31 in after-hours trading Monday. 

Image by Memed_Nurrohmad from Pixabay