Published on: September 19, 2024, 04:52h.
Last updated on: September 19, 2024, 04:52h.
Endeavor Group Holdings, Inc. (NYSE: EDR) is looking to sell its OpenBet and IMG Arena sports betting data businesses, with the possibility of OpenBet selling at a discount compared to its original purchase price.
Endeavor decided to divesting OpenBet after originally agreeing to pay $1.2 billion for the business from Scientific Games, but the price was later reduced to $800 million. Eilers & Krejcik Gaming (EKG) suggested that OpenBet might sell for $300 million, especially if Flutter Entertainment (NYSE: FLUT) considers bringing the business in-house.
Although Flutter has not confirmed the potential move, it is a major client of OpenBet, along with other UK-based sportsbook operators.
OpenBet remains a key player in sports betting infrastructure, powering various sportsbooks in the UK and Australia. However, the company has faced a decline in its US business due to operators bringing technology in-house.
The list of potential buyers for OpenBet is limited, with Apollo Global Management (NYSE: APO) possibly showing interest after finalizing acquisitions of Everi (NYSE: EVRI) and International Game Technology (NYSE: IGT). EKG also mentioned the possibility of a management buyout or private equity firm acquiring OpenBet at a discounted price.
EKG suggested that a transaction for OpenBet could happen in the next few months, leaving the business mostly unchanged.
“Most likely, though, in our view, is that private equity or some kind of fund swoops in, thanks to the discount and strong recurring revenues,” added EKG.
Regarding IMG Arena, Endeavor is also looking to sell this sports betting data unit, but potential buyers and sale price remain uncertain.
“It’s hard to see past fellow data giants Genius Sports (NYSE: GENI) and Sportradar (NASDAQ: SRAD) as acquirers,” according to EKG.
Recent rumors linked Genius Sports to a takeover of Sweden’s Kambi Group Plc (OTC: KMBIF), although both parties denied the speculation.