DraftKings announced that it has reached an agreement to acquire lottery app Jackpocket for a total consideration of approximately $750 million, in a deal the US sports betting giant expects will generate up to $340 million in additional revenue annually.
Under the terms of the merger agreement, Jackpocket stockholders will receive a total consideration of approximately $750 million on a fully diluted basis, consisting of approximately $412.5 million in cash, subject to certain customary purchase price adjustments, and approximately $337.5 million in the company’s Class A common stock.
The merger agreement and the proposed transaction have been approved by the Boards of Directors of both DraftKings and Jackpocket, as well as Jackpocket’s stockholders. The transaction is subject to the receipt of required regulatory approvals and other customary closing conditions and is expected to close by the second half of 2024.
Jason Robins
Jason Robins, Co-founder and CEO of DraftKings, said: “We are very excited to enter the rapidly growing U.S. digital lottery vertical with our acquisition of Jackpocket.”
“This transaction will create significant value for DraftKings not only by giving our customers another differentiated product to enjoy but also by improving our overall marketing efficiency similar to how our daily fantasy sports database created an advantage for DraftKings in OSB and iGaming,” he noted.
Peter Sullivan
For his part, Peter Sullivan, CEO of Jackpocket, commented: “Together with DraftKings, we will be able to bring tremendous value to our customer base as we advance our mission to create a more convenient, fun, and responsible way to take part in the lottery.”
“DraftKings’ broad footprint and exceptional mobile products present an opportunity to meaningfully expand the digital lottery vertical, and we could not be more excited to come together with DraftKings,” he added.
Jackpocket, founded in 2013, offers customers a route to ordering official lottery tickets in multiple states. It is currently available in 18 US jurisdictions, including New York, Texas, and Ohio. The New York City-headquartered business claims that its app was downloaded nine times more than its closest competitor in the digital lottery app category in fiscal year 2023.
DraftKings expects the proposed transaction to drive $260 million – $340 million of incremental revenue and $60 million – $100 million of incremental adjusted EBITDA in fiscal year 2026. It also expects the acquisition to drive $350 million – $450 million of incremental revenue and $100 million – $150 million of incremental adjusted EBITDA in fiscal year 2028.
The deal comes as DraftKings reported revenue of $1.23 billion for the fourth quarter of 2023, an increase of $376 million or 44% compared to $855 million during the same period in 2022, leading it to raise its full-year guidance for 2024. In the full year 2023, DraftKings saw a revenue rise of 63% to $3.7 billion.
Original article: https://www.yogonet.com/international/noticias/2024/02/16/70869-draftkings-to-acquire-jackpocket-for-750m-in-deal-expected-to-drive-300m-annual-revenue
