Fanatics to buy PointsBet U.S. assets

Fanatics to buy PointsBet U.S. assets

The Fanatics logo is seen on the wall of the dugout before the game between the Pittsburgh Pirates and the Milwaukee Brewers at PNC Park on July 3, 2022 in Pittsburgh, Pennsylvania. (Photo by Justin Berl/Getty Images)

Justin Berlin | Getty Images

Fanatics has agreed to acquire PointsBet’s US operations, marking the sports giant’s first major leap into the US sports betting space.

The deal has a cash value of approximately $150 million. The companies announced the deal Sunday night, shortly after CNBC reported that an agreement had been reached.

“Fanatics and PointsBet are pleased to enter into an agreement for Fanatics Betting and Gaming to acquire PointsBet’s US business,” the companies said in a joint statement. “Although there are still several steps in the process to complete the acquisition, both parties are confident in the outcome. Fanatics Betting and Gaming and PointsBet will provide further details on the proposed deal and timely updates in the coming weeks.”

Fanatics will gain access to at least 15 states with the deal, according to people familiar with the deal, who declined to be identified because the talks were confidential. According to one of the people, Fanatics expects to have access to most states where PointsBet operates by the start of the NFL season.

PointsBet, whose shares are traded in Australia, is expected to hold a shareholder vote on the deal in late June. Only PointsBet’s US assets are part of the deal. Fanatics will plan to fund some of PointsBet’s remaining cash flow, which has had to invest heavily in marketing to compete with larger rivals DraftKings and FanDuel.

PointsBet forecast a loss of between $77 million and $82 million for the second half of the year. Citing “very challenging” market conditions, the company said on Sunday it would need to raise additional capital at a “significant discount to current market prices” in the near future if the deal with Fanatics somehow fell through.

NBCUniversal will receive proceeds from its previous deal with PointsBet and will no longer have an equity interest, according to PointsBet. NBC acquired a 4.9% stake in PointsBet in 2020.

Fanatics has been in talks with a number of different sports betting companies over the past year to chart its future path in mobile gaming.

“This is a 10-year journey,” said Matt King, the CEO of Fanatics Betting, at the SBC conference earlier this month. “We will be very methodical in driving this 10-year journey. And by doing that and taking that approach, we can be a little more considerate in our choices. You can go slower today, a little slower, to go faster later.”

Fanatics is a sports platform company with a private valuation of $31 billion. The company forecasts sales of $8 billion in 2023.

Fanatics owns trading assets, a sports trading card business and is developing a sports betting division. The company acquired legendary trading card company Topps for $500 million last year.

Disclosure: NBCUniversal is the parent company of NBC Sports and CNBC.