By Jeremy C. Owens
Endeavor Group Holdings Inc. is doubling down on its sports-gambling bet, and investors seem to like it.
Endeavor /zigman2/quotes/214253748/composite EDR +1.18% , parent company of the William Morris and IMG agencies as well as UFC, announced Monday afternoon that it has agreed to pay $1.2 billion for OpenBet, a division of Scientific Games Corp. that provides platforms for regulated sports-betting apps. OpenBet customers include DraftKings /zigman2/quotes/213120645/composite DKNG +2.09% , Flutter Entertainment PLC’s /zigman2/quotes/206709455/delayed IE:FLTR -1.93% FanDuel and Wynn Resorts Ltd.’s /zigman2/quotes/208845907/composite WYNN -0.03% WynnBet, Endeavor said. Endeavor already owns IMG ARENA, a service that provides live video streams and some data for sports events, and plans to combine those entities into a single-stream option for sportsbooks and other customers.
“OpenBet marks a strategic addition to our sports betting portfolio as we look to round out our technology and product offering for sportsbook operators and sports brands worldwide,” Chief Executive Ariel Emanuel said in a statement Monday. “The combination of OpenBet and our IMG ARENA business will enable us to expand our footprint across the entire sports betting value chain and further capitalize on the tremendous upside we see coming from this fast-growing global industry.”
Endeavor stock jumped nearly 8% higher in after-hours trading following the announcement Monday afternoon. Scientific Games stock also received a boost, gaining more than 5% in the extended session.
Endeavor said it would pay $1 billion in cash for OpenBet, with another $200 million in its own stock. The parties expect the transaction to close in the second quarter of 2022.