raftKings is driving ahead with plans to go public in April through a reverse merger. The Boston-based gaming and fantasy sports company agreed in December to a three-way deal valuing it at $3.3 billion with gaming technology provider SBTech and Diamond Eagle Acquisition Corp. (DEAC), a publicly traded special purpose acquisition company.
Diamond Eagle, led by industry veteran Harry Sloan, announced Wednesday that it had received the approval from the Securities and Exchange Commission and is now moving to the final step in the process, Variety reports. An April 23 meeting has been scheduled for Diamond Eagle shareholders to vote on the business combination with DraftKings and SBTech, after the special meeting was earlier delayed due to the coronavirus pandemic.
“We are pleased that our registration statement was declared effective by the U.S. Securities and Exchange Commission this morning, which brings us another step closer to our goal of becoming a public company in April,” DraftKings Chief Financial Officer Jason Park told Bloomberg on Wednesday.
Diamond Eagle, a so-called blank check company, raised $400 million in an initial public offering in May. It said in a statement Wednesday that the deal also involves issuing shares in its DEAC Nevada unit.
The deal is valued at $2.7 billion. Diamond Eagle will combine with DraftKings and SBTech to create what’s described as the only vertically integrated U.S. sports betting and online gaming company. Upon conclusion of the deal, the new DraftKings will become a publicly traded company under the new symbol of “DKNG” and become incorporated in Nevada. The new company will have more than $500 million of unrestricted cash to ensure access to capital to fuel growth.
DraftKings offers mobile and online sports betting in Indiana, New Jersey, Pennsylvania and West Virginia, and sports betting at retail locations in Iowa, Mississippi, New Jersey and New York. The DraftKings deal was orchestrated by Sloan, who has launched six public acquisition vehicles with Jeff Sagansky since 2011. Diamond Eagle bowed in May with a $400 million public offering.
DraftKings will continue to be headed by CEO Jason Robins, a co-founder of DraftKings along with Paul Liberman and Matt Kalish, who will also stay on as senior managers.
Sloan served as chairman and CEO of MGM between 2005 and 2009 prior to the completion of its restructuring via a pre-packaged bankruptcy. He was also the founder, chairman and CEO of SBS Broadcasting, Europe’s second-largest broadcaster. Sagansky worked for three decades in show business, including serving as president of CBS Entertainment between 1990 and 1994, and as CEO of Paxson Communications from 1998 to 2003.