A new report from the gaming (by which we mean gambling) industry watchdog Eilers & Krejcik, suggests that FanDuel’s backers, who are led by private equity giant KKR, are actively searching for a buyer for the the daily fantasy sports company.
The report says: “Both DraftKings and FanDuel are said to be pounding the fundraising pavement.”
“We’ve heard rumors that FanDuel was close to a significant round that was scuttled by regulatory concerns . . . Both companies are leaning heavily on the sports betting narrative to make their case to potential investors, but with the Supreme Court decision expected in weeks to months it’s easy to see a world in which money waits on the sidelines until a decision is rendered, even if it means paying a premium should the Court come back with a positive decision.”
According to tech business site, Axios, ‘multiple sources’ have reported that that the fantasy sports site is likely to participate in a reverse merger with Platinum Eagle Acquisition Corp., a special purpose acquisition company (SPAC) formed earlier this year by veteran media executive Jeff Sagansky.
Special purpose acquisition companies are management teams that raise money from public markets, to buy one or more companies. Platinum Eagle raised $300 million earlier this year and is currently trading on the NASDAQ stock exchange.
There’s no information as yet on what Platinum Eagle might pay for the company, or what percentage of the company is may seek to acquire. In 2017 FanDuel claimed its fully-diluted value was $1.2 billion, which was calculated for the proposed merger with rival DraftKings, which was blocked by US antitrust regulators.
One outcome of a deal with Platinum Eagle would be to place FanDuel on the public markets, due to the company’s existing stock market listing.
Axios report that, following the decision to block the merger, FanDuel held a number of talks with private investors about a new round of funding, in addition to the approximately $435 million the company has raised from firms including KKR, NBC Sports, Comcast Ventures and the NBA.
FanDuel employs approximately 140 employees across its offices in Edinburgh and Glasgow.