DraftKings said the acquisition of the online gaming specialist – announced in August of 2021 – would allow the business to “broaden its reach and enhance the combined company’s igaming product offerings”.
DraftKings expects $300m worth of annual synergies from the deal at maturity, while it also anticipates revenue to grow through cross-selling opportunities.
“Acquiring Golden Nugget Online Gaming gives us synergies across our business,” said Jason Robins, Chairman and CEO of DraftKings. “We anticipate that this acquisition will provide meaningful revenue uplift by utilizing our data-driven marketing capabilities and a dual brand igaming strategy, gross margin improvement opportunities, and cost savings across external marketing and SG&A.
“I am proud to welcome the Golden Nugget Online Gaming team to the DraftKings family.”
DraftKings will pay 0.365 newly issued shares for each common share of Golden Nugget Online Gaming. At the time of the deal, DraftKings shares traded at $51.59, though they have since declined to $14.99 upon market close yesterday.
As a result, the deal – which was set to be worth $1.56bn at the time of announcement – would now be worth around $450m.
As part of the deal, Tilman Fertitta, chairman and CEO of Golden Nugget Online Gaming, will join the DraftKings board. In addition, certain integrations will be in place between DraftKings and the Golden Nugget land-based business, also led by Fertitta, from which GNOG was spun off.
In addition, GNOG president Thomas Winter will become DraftKings’ president of North America igaming.
“This will be an alliance unlike any other in the digital sports, entertainment and online gaming industry,” Fertitta said. “Now that the acquisition is completed, I look forward to what the future will bring for our combined company and am confident this relationship will be a huge success.”
The deal was initially expected to close in the first quarter of 2022. However, that deadline passed without the businesses gaining all the approvals necessary to combine.
As a result, the deadline was pushed back to 31 May.