Allwyn details financing plans for $1.6 billion PrizePicks acquisition

Allwyn is set to take a 62.3% majority holding in PrizePicks having agreed a deal worth $1.6 billion.

Allwyn International has announced a $1.64 billion term loan to finance its acquisition of a majority stake in PrizePicks.

In a short trading update released on Monday it said proceeds from Term Loan B will be used to fund the acquisition and associated fees and expenses. Allwyn agreed to acquire the stake in September, in a deal marking its entrance into US daily fantasy sports market.

Should the acquisition proceed as expected, Allwyn will take a 62.3% majority holding in the business, paying an initial cash consideration of $1.6 billion for the stake.

This implies an enterprise value of $2.5 billion for PrizePicks. However, should it hit certain performance metrics over the next three years, this could increase to $4.15 billion.

PrizePicks’ current CEO Mike Ybarra and the existing leadership team will continue to run the brand as a standalone within Allwyn. They will also retain the majority of their ownership interest in the business.

Subject to certain closing conditions, the deal will complete in the first quarter of next year.

Allwyn talks up ‘positive’ Q3 performance

Meanwhile, Allwyn has issued a short trading update on its performance in Q3, ahead of the group publishing results the quarter on 30 October.

Allwyn noted a somewhat challenging September for its sports betting operations. It said its business was affected by “exceptionally” customer-friendly sports results during the month, with this impacting sports betting margins.

However, it said this was an industry-wide phenomenon and not limited to its business. The group also played down any long-term impact, saying variation in sports margins due to customer or operator-friendly sports results “average out over time”.

On this, it noted its diversification, particularly with lottery and other verticals, also reduced the impact of these resultd. As such, it said other underlying trends remain “positive”.

Acquisitions aplenty for Allwyn

The PrizePicks acquisition is one of just major developments announced by Allwyn in recent months. In October, Allwyn International and OPAP agreed to merge and create a lottery and gaming business worth an estimated €16 billion. The deal also includes plans to list on another global international exchange such as London or New York.

In addition, in July, Allwyn International announced the sale of its land-based casino assets in Germany and Australia. It also acquired the remaining minority stake in Greece- and Cyprus-facing online operator Stoiximan.

The group also recently established the new Allwyn Digital division. Headed by ex-Betfred US CEO Kresimir Spajic, the business aims to evolve Allwyn digitally, providing bettors with engaging experiences.