DraftKings has reached a deal that will lead to it becoming a publicly-traded company.
The online-gaming giant known for its sports-betting platform has agreed to a business combination with Diamond Eagle Acquisition Corp, a special purpose acquisition company, and SBTech, a sports betting and gaming technologies provider. The newly formed company is expected to have a market capitalization of about $3.3 billion.
As part of the deal, Diamond Eagle will change its name to DraftKings, reincorporate in Nevada, remain on the Nasdaq and change its stock ticker, currently DEAC. The deal is expected to close during the first half of 2020 and lead to DraftKings being traded on the Nasdaq.
“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, in a statement.
Institutional investors committed to a private placement of $304 million of Class A common stock. The company is expected to have more than $500 million on its balance sheet at the deal's closing.
DraftKings' leadership team will lead the newly formed entity with SBTech's management team staying on to bring trading and risk management experience.
"DraftKings is already a premier online fantasy sports and betting platform," Harry Sloan, founding investor of Diamond Eagle, said in a statement. "With the full integration of SBTech’s technology and innovative product expertise coupled with the right capitalization, DraftKings will be in a great position to continue its ambitious expansion plans in the United States."