European online and retail sportsbetting and gaming operator Paddy Power Betfair has announced the signing of a definitive agreement that is to see it purchase a controlling stake in American daily fantasy sports firm FanDuel Incorporated.
Dublin-headquartered Paddy Power Betfair revealed the deal via a Wednesday press release (pdf) and stated that its completion will leave the firm better placed to target the prospective United States sportsbetting market in the wake of the recent quashing of the federal Professional and Amateur Sports Protection Act (PASPA) of 1992.
Paddy Power Betfair entered the American daily fantasy sports market last year following its $48 million purchase of PlayDraft.com and explained that this latest agreement is expected to be finalized during the third quarter of the year subject to the receipt of the necessary approvals and see its existing Betfair US business combined with that of FanDuel Incorporated.
“We are excited to add FanDuel [Incorporated] to the group’s portfolio of leading sports brands,” read a statement from Peter Jackson, Chief Executive Officer for Paddy Power Betfair. “This combination creates the industry’s largest online business in the United States with a large sports-focused customer base and an extensive nationwide footprint.”
Paddy Power Betfair stated that the current structure of the agreed deal is to see it acquire a 61% stake in the amalgamated entity, which will become a fully consolidated subsidiary, with the remaining interests controlled by existing FanDuel Incorporated investors. However, it has also arranged a mechanism that is to see its holdings in the new subordinate hit 80% within three years before buying out the remaining shareholders by 2024.
To complete the acquisition, Paddy Power Betfair declared that it has agreed to contribute its existing assets in the United States, which are worth approximately $612 million, as well as $158 million in cash. Once the deal is finished, it explained that it intends to name a new Chief Executive Officer for the subsidiary as well as the majority of a fresh board of directors.
“We are excited to bring these two great businesses together,” read a statement from Matt King, Chief Executive Officer for New York City-based FanDuel Incorporated. “The combination of brands and team along with a shared culture and vision for the future creates the leading gaming destination for United States sports fans.”