Super Group, the parent of bookmaker Betway and iGaming brand Spin, has agreed to be taken public in a $4.75 billion deal with Sports Entertainment Acquisition Corp., a blank check firm led by a pair of former sports-league executives.
The SPAC’s management team is led by former NFL EVP Eric Grubman and former NHL COO John Collins. Wall Street veteran Chris Shumway, PJT Partners, and Timothy Goodell, bother of NFL commissioner Roger Goodell, are also sponsors.
As part of the deal, Super Group has agreed to buy Digital Gaming Corp., which has been exclusively licensing the Betway brand in the U.S. That acquisition will give the company market access in 10 U.S. states, including Pennsylvania, New Jersey and Colorado, according to a statement detailing the transaction.
The combined company, valued at $4.75 billion pre-money, will aim to make headway in a multi-billion-dollar U.S. sports betting market that is growing with each new state’s legalization. Those new laws have often come hand in hand with legalized online casino games, known as iGaming, a higher-margin business that has a larger addressable market.
Super Group forecasts more than $1.5 billion in net gaming revenue this year and already has a significant presence overseas (it’s licensed in 23 global jurisdictions), meaning the U.S. isn’t the end-all-be all. It doesn’t need to be a market leader in the U.S., Collins said, to continue growing a profitable and successful business globally.
“This group already has real operating scale, 3,500 employees around the world in more than a dozen offices, and they’re big in data science and technology,” he said. “That, combined with 20 years in the business, gives them the experience to come into new markets and have a big impact.”
The company said it will be debt free and have $200 million in cash on its balance sheet at closing, when it plans to trade under the ticker symbol SGHC. Grubman, chairman of the SPAC’s board, will be chairman of the combined company. Collins will serve on its board.
There are a small handful of Super Group shareholders, including South African entrepreneur Martin Moshal, who currently hold about 70% of the company and will not be selling any equity, according to the release. In total, Super Group’s existing shareholders will hold about 88% of the company at closing, which is expected in the back half of the year.
Betway, which was recently hit with a U.K.-record $16 million (11.6 million pounds) regulatory fine, is an online-only sportsbook, meaning it doesn’t have the brick-and-mortar locations that are popular among other European operators. The group is the main jersey advertiser with English soccer club West Ham United, and its sponsorship portfolio includes deals with the Brooklyn Nets, Los Angeles Clippers and Golden State Warriors.
The group plans to utilize the expertise of Collins and Grubman for sponsorships and market-access deals. Sports teams and league have emerged as power brokers in the growing U.S. market, and having former NFL and NHL executives could help the company source and navigate those agreements.
“In Eric and John we really do believe we’ve found the ideal partners,” said Richard Hasson, Super Group’s president and COO. “It’s their networks, their history and experience in sports and entertainment, and with Eric, his experience in corporate finance. We really think it’s a package that’s a perfect fit.”
Though the stream of new SPACs has cooled considerably in the last few weeks, partially due to increased scrutiny from the SEC, blank check firms that are already public are still actively searching for targets. Recent deals include ticket marketplace Vivid Seats agreeing to go public through a SPAC led by Los Angeles Dodgers co-owner Todd Boehly.
Sports Entertainment Acquisition Corp. filed for its IPO in September, with the goal of using its $350 million to acquire a target at the intersection of sports, entertainment and technology. As examples, the group listed ESPN, Ticketmaster, Fanatics and On Location, the hospitality company that was spun off from the NFL in 2015 and recently acquired by Endeavor (Collins previously served as CEO of On Location).
Super Group is based in Guernsey. Oakvale Capital advised the company on the deal, while Goldman Sachs and PJT Partners advised the SPAC.