Endeavor begins integration of OpenBet and IMG Arena

3rd October 2022 8:29 am GMT

Shares in Endeavor Group Holdings gained more than 5 per cent in New York Friday as the company completed its acquisition of sports betting supplier OpenBet.

The $800m acquisition, which was first announced in September 2021, enables Endeavor to capitalise on sports betting opportunities globally by combining OpenBet’s sports betting technology and services with Endeavor’s IMG Arena sports data and content business.

Endeavor is settling the transaction with $750m in cash and the award of 2.3m Endeavor shares to Light & Wonder (L&W), with the proceeds of the sale to be used by L&W to reduce debt to a targeted net debt leverage ratio range of 2.5x to 3.5x.

“The addition of OpenBet to our sports betting portfolio will enable us to further capitalize on the massive tailwinds in the fast-evolving sports betting ecosystem and lead the way in defining the future of sports betting entertainment,” said Ariel Emanuel, CEO of Endeavor. 

“In combination with our IMG Arena sports data and content business, we’ll look to create and unlock meaningful value for our rights holder and sportsbook customers, helping deliver the most compelling offerings for sports fans globally.”

OpenBet and IMG Arena will form a fourth operating segment for Endeavor, Sports Data & Technology, beginning January 2023.

“We’ve been awaiting this day when we can bring together everything OpenBet has to offer with the depth of expertise and relationships that Endeavor and IMG bring to the table,” said Jordan Levin, CEO of OpenBet. “Our focus remains on providing our customers with the most innovative solutions to give their fans the ultimate sports betting complement to live sports. We couldn’t be more excited to lean into the Endeavor network to accelerate and amplify that mission.”

The sale of OpenBet completes L&W’s strategic plan to streamline the organization and follows the sale of the Scientific Games lottery business to Brookfield Business Partners for $5.8bn in April.

“With the completion of the OpenBet divestiture and our now streamlined organization, Light & Wonder is well positioned to execute on our growth strategy with a singular focus on building great games fully cross-platform,” said Matt Wilson, interim chief executive at Light & Wonder. “With our R&D engine and world class talent at our core, we have an unparalleled ability to leverage our leading industry positions, evergreen franchises and unmatched platforms to drive sustainable differentiation and significant value. I want to thank our teams for their hard work and dedication to ensure a quick and successful completion of this important transaction. Endeavor is the right partner for OpenBet and we wish our OpenBet colleagues all the best on this exciting new chapter.”

“With our high mix of recurring and digital revenues, double-digit growth profile, $1.4 billion of 2025 targeted consolidated AEBITDA and strong cash flow, we have created an opportunity to generate significant excess capital,” Wilson added. “Our enhanced financial flexibility accelerates our ability to return substantial capital to shareholders through our share repurchase program, while also pursuing our key growth initiatives, enabling us to unlock tremendous shareholder value going forward.”

Shares in Endeavor Group Holdings Inc. (NYSE:EDR) gained 5.14 per cent to close at $20.26 per share in New York Friday, while shares in Light & Wonder Inc. (NASDAQ:LNW) closed 2.41 per cent lower at $42.88 per share.

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