© Reuters.
BOSTON & NEW YORK – DraftKings Inc. (NASDAQ: NASDAQ:), a digital sports entertainment and gaming company, has announced an agreement to acquire Jackpocket, a prominent U.S. digital lottery service provider, for approximately $750 million. The transaction, which includes a mix of cash and stock, is expected to bolster DraftKings’ position in the sportsbook and iGaming industry.
The acquisition, which was finalized on February 11, 2024, will consist of roughly 55% cash from DraftKings’ balance sheet and about 45% in DraftKings’ Class A common stock. Jackpocket stockholders will receive roughly $412.5 million in cash and approximately $337.5 million in stock, contingent on customary price adjustments.
Jason Robins, Co-founder and CEO of DraftKings, expressed enthusiasm for the merger, highlighting the strategic benefits for marketing efficiency and customer engagement. Peter Sullivan, CEO of Jackpocket, echoed this sentiment, anticipating significant value creation for their customer base.
DraftKings projects that the merger will generate an incremental $260 million to $340 million in revenue and $60 million to $100 million in Adjusted EBITDA by fiscal year 2026. By fiscal year 2028, the figures are expected to rise to $350 million to $450 million in revenue and $100 million to $150 million in Adjusted EBITDA, assuming no new legalizations in online sports betting (OSB) and iGaming.
The deal has received approval from the Boards of Directors of both companies and Jackpocket’s stockholders. Completion of the transaction, subject to regulatory approvals and customary closing conditions, is anticipated in the second half of 2024.
Both DraftKings and Jackpocket prioritize responsible gaming, with Jackpocket certified by the National Council on Problem Gambling’s assessment program and both companies offering tools to promote responsible behavior.
Goldman Sachs & Co (NYSE:). LLC and Sullivan & Cromwell LLP served as advisors to DraftKings, while The Raine Group and Cooley LLP advised Jackpocket.
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