DraftKings is one step closer to going public after shareholders of Diamond Eagle Acquisition Corp. voted Thursday to approve a deal that will merge the sports betting firm and gaming platform SBTech into a single entity.
The merger agreement values the combined company at $3.3 billion and will allow DraftKings to begin public trading without holding an initial public offering. Diamond Eagle operates as a publicly traded special purpose acquisition company, using funds raised through public offerings to fund acquisitions.
Once the deal is finalized, DraftKings will list on the Nasdaq exchange under the stock ticker “DKNG.” Since closing conditions are still to be worked out, the company’s exact timeline to begin public trading is unclear.
Diamond Eagle announced earlier this month it has received approval from the U.S. Securities and Exchange Commission to move forward with the merger. DraftKings is expected to go public with more than $500 million in unrestricted cash on hand.
Founded as a daily fantasy sports company, DraftKings has emerged as a top betting operator since the U.S. Supreme Court struck down a federal ban on sports gambling in 2018. The company operates physical sportsbooks in New Jersey, New York and Mississippi, as well as online betting in several other states. Past investors include Major League Baseball and Dallas Cowboys owner Jerry Jones.
DraftKings is set to go public amid unprecedented turbulence in global markets due to the coronavirus pandemic. Even before the outbreak, recent IPOs involving rising firms such as Uber, Lyft and Peloton fell short of expectations.
The pandemic has placed severe pressure on the U.S. betting market as shelter-in-place orders and guidance against mass gatherings forced the suspension of live sporting events. Nearly all U.S.-based casinos were forced to close, though mobile sports betting has remained active.
DraftKings CEO Jason Robins, who will lead the combined entity when the merger closes, told FOX Business Network last month the pandemic wouldn’t derail the company’s plans.
“On our end, I think the plans are the same,” Robins said. “We don’t have a big physical presence. Being a digital company, obviously not having sports reduces the amount of content we have. But the types our team is working on, the products we’re working on, nothing much has changed there.”