The acquisition of PointsBet’s U.S. business by Fanatics was approved almost unanimously at PointsBet’s shareholder meeting in Australia late last week. Fanatics increased its initial offer of $150 million by 50% to $225 million, outbidding DraftKings’s offer of $195 million.
Fanatics calls the acquisition “a pivotal moment” as it looks to become a bigger player in the sports betting space. With the deal, Fanatics will acquire all of PointsBet’s US assets and its gaming licenses in 14 states.
The completion of the sale comes after DraftKings did not come back with a final offer Tuesday evening. The company released a statement that night.
“DraftKings Inc. today announced that the company is no longer pursuing the acquisition of the US business of PointsBet Holdings Ltd. The company thanks PointsBet for their time and access over recent weeks.”
PointsBet will now focus on business in Australia, Canada and India
PointsBet’s board supported Fanatics’s new offer, noting it had confidence in the pricing of the offer and the ability for the deal to be completed in a timely manner. PointsBet chairman Brett Paton emphasized the board’s opinion.
“The board unanimously supports the improved proposal from Fanatics Betting and Gaming, which provides a superior price plus certainty. Fanatics Betting and Gaming conducted their diligence process and negotiations in a highly professional manner at all times. The offer to ‘front end’ the additional consideration is an element which we regarded as a welcome and significant benefit to our shareholders.”
Paton also said he was confident in the future of the US-based team with Fanatics. PointsBet will now be able to focus more on its business in Australia, Canada and India.
Deal should be final by early 2024
The deal is expected to reach initial completion around the end of August, with Fanatics paying $175 million then plus another $50 million in early-2024. The deal is expected to be completed by February but could extend into March.
With the completion of the deal, PointsBet shareholders can expect a bump in distribution from the sale, receiving A$1.39 to A$1.44 per share, up from A$1.07 to A$1.10 per share prior to the additional $75 million from Fanatics.
Fanatics is looking to establish itself as soon as possible in the new markets it will inherit. Some of the licenses won’t transfer right away, according to a May New York Gaming Commision meeting, Fanatics will only receive PointsBet’s New York license when it becomes the new outright owner of the license. Fanatics aims for that to happen by the upcoming NFL season.
By acquiring PointsBet’s US licenses, Fanatics will be able to operate in these states:
- New Jersey
- New York
- West Virginia
What is Fanatics?
Fanatics is an American manufacturer and online retailer of sports apparel founded by former Philadelphia 76ers minority owner Michael Rubin. The company has headquarters in Jacksonville and New York. The company has a deal with Nike to design and manufacture all Nike fan gear for the MLB, NBA and NFL.
In 2022, Fanatics acquired Topps, a popular licensed trading card brand that has been part of the trading card business for over 70 years. Fanatics also acquired trading card manufacturing and distribution rights for the MLB, NBA and NFL in 2021. Fanatics also owns apparel brand Mitchell & Ness.
Beyond the MLB, NBA and NFL, Fanatics sells gear for many leagues like the F1, MLS, NASCAR, NCAA, NHL, WNBA and WWE.