Genius Sports to go public via $1.5bn deal with dMY Technology Group



In response to mounting speculation this week, sports data firm Genius Sports Group has issued a statement saying it will go public by combining with NYSE-listed dMY Technology Group in a deal estimated to be worth circa $1.5bn.

In response to mounting speculation this week, sports data firm Genius Sports Group has issued a statement saying it will go public by combining with NYSE-listed dMY Technology Group in a deal estimated to be worth circa $1.5bn.

The ‘special purpose acquisition company’ (SPAC) deal includes a $330m fully committed private investment (PIPE) anchored, said the statement, by institutional and experienced industry investors

On completion, the combined company (Newco) is expected to have approximately $150m of growth capital and a substantially debt-free balance sheet to accelerate its US and international expansion through organic growth and strategic acquisitions. As a result of the business combination, shareholders in both firms will swap their stock for shares in the NewCo which will be publicly listed on the New York Stock Exchange.

The statement also revealed to some extent how the management structure will take shape, with current Genius Sports CEO Mark Locke taking on the role of Newco CEO. He will, according to the missive, be supported by a “deep bench of talent with substantial experience across finance, technology and the sports betting industry”.

NewCo’s Board of Directors will include dMY II’s Chairman Harry You and dMY II’s CEO Niccolo de Masi. 

Explaining the rationale behind the deal, Locke said: “Genius Sports Group created the market for official data across all tiers of sports, helping fuel our sportsbook partners’ ever-increasing range of products. This transaction will help us continue to expand and strengthen our position as a nexus of the global sports, betting and media ecosystem.”

“Elemental data provider Genius Sports Group benefits from the growth of all participants in the global sports betting market. Mark Locke has pioneered the provision of official rights and live data which have been instrumental in building the modern sports betting market,” said de Masi. “The company has a strong track record of growth and we are very excited by the opportunities for further expansion in this rapidly growing segment.”

The transaction values NewCo at an anticipated initial enterprise value of approximately $1.5bn, or 8 x GSG’s currently projected 2021 revenue of $190m. The consideration payable to GSG’s existing shareholders will consist of a combination of cash and rollover equity in NewCo. 

The proceeds of the $330m PIPE transaction will be used to repay shareholder loans and to redeem and make certain preference share payments on preferred shares held by corporate shareholders. Assuming no redemptions by dMY II’s public stockholders, it is anticipated that NewCo will have approximately $150m of unrestricted cash and a substantially debt-free balance sheet at closing.

The Boards of Directors of both dMY II and GSG have unanimously approved the transaction which will require the approval of dMY II’s stockholders, and is subject to other customary closing conditions, including a minimum cash condition. The transaction is expected to close in Q1 2021.

This article is a reprint from SBCAmericas.com. To view the original story and comment, click here.


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