New York-listed Penn National Gaming has entered into an agreement to acquire digital media and mobile sportsbook operator Score Media and Gaming for US$2bn in cash and stock.
theScore shareholders will receive $17 in cash and 0.2398 shares of Penn National common stock for each share, implying a total purchase consideration of $34 based on Penn National’s 5-day volume weighted average trading price as of 30 July.
Upon completion, current Penn National and theScore shareholders will hold 93 per cent and 7 per cent of the company’s outstanding shares respectively. Penn National expects to fund the $1bn cash portion of the consideration using existing cash on its balance sheet.
“We are thrilled to be acquiring theScore, which is the number one sports app in Canada and the third most popular sports app in all of North America,” said Penn National president and CEO Jay Snowden. “theScore’s unique media platform and modern, state-of-the art technology is a powerful complement to the reach of Barstool Sports and its popular personalities and content.”
Snowden said that the deal would allow the company to fully control its own tech stack through theScore’s state-of-the-art player account management system and its ongoing development of an in-house managed risk and trading service platform.
“This should lead to significant savings in third party platform costs and allow us to broaden our product offerings – providing the missing piece for operating at what we expect to be industry leading margins,” continued Snowden. “In addition to the synergies, we’ll be gaining access to theScore’s deep pool of product and engineering talent and data-driven user analytics which will help drive our customer acquisition, engagement, retention strategies and cash flows.”
The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in Q1 2022.
“This deal brings together two companies that share a vision for how media and gaming intersect, and we could not be more excited to join the Penn National family,” said theScore chairman and CEO John Levy. “I’m proud of theScore team and all of our accomplishments, and believe the time is right to take the next step and align with a company in Penn National with the resources and scale to accelerate our business.
“We are excited to join forces with Penn to form the most powerful media and gaming company in North America.”
Following the acquisition, Levy will continue to oversee theScore’s operations with president and chief operating officer Benjie Levy.
“We’ve built an innovative, technology-led integrated media and gaming business that has us poised for success across North America, including the highly anticipated upcoming rollout of commercial sports betting in Canada,” added John Levy. “With Penn’s support, we will continue to invest in building our Canadian operations, growing our footprint and expanding our workforce.”
Shares in Penn National Gaming Inc (NASDAQ:PENN) were trading marginally lower by 0.67 per cent at $66.24 per share in New York early Thursday, while shares in Score Media and Gaming Inc (TSE:SCR) closed up 4.94 per cent at CAD$22.75 in Toronto Wednesday.