The Penn National Gaming logo is displayed on a smartphone.
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Shares of Score Media and Gaming, which manages the Score, rose more than 60% Thursday morning after Penn National announced it had acquired the company for $ 2 billion in numbers and stock options. Shares of Penn National fell 2% after the markets opened.
The deal increases Penn National’s reach in North America, as TheScore has positioned itself to exploit the Canadian mobile sports betting market.
Penn National said Score shareholders will receive $ 17 in number and 0.2398 shares of its common stock for each part of TheScore, bringing the total share price to $ 34.00. Penn National estimates that the acquisition will provide an increase in adjusted EBITDA over two years, a medium-term adjusted EBITDA of $ 200 million, and a $ 500 million adjusted long-term incremental EBITDA.
Goldman Sachs and Morgan Stanley were counsel in the transaction.
Penn National also supports the Barstool Sports app, which it acquired in 2020 for $ 450 million. In a statement, Penn National CEO Jay Snowden said the acquisition of Score will allow the company to get the company’s internal technology. That “should bring significant savings in third-party platform costs and allow us to expand our product offering – providing the missing piece to operate at what we expect to be leading margins in the industry.
“In addition to synergies, we will gain access to our in-depth pool of product talent and engineering and data-based user analysis, which will help drive our customers’ acquisition, engagement, and retention strategies and cash flows, ”he added.
TheScore made a transition in its digital outlet role based in 2012 when it sold its broadcasting business to Rogers Communications for $ 167 million. He has built a division of sports and media games and has tried to tap into his mobile app user base in a competitive sports betting business. The company launched its new flagship app for mobile betting in 2019, and this year it made its debut on the Nasdaq.
Score Media and Gaming will ring the opening bell on the Nasdaq on March 16, 2021.
While discussing Score’s future last March, Chris Lencheski, president of private equity consulting firm Phenicia Lencheski, warned the dollar average to acquire a new client that will begin to weigh on businesses soon. capital and would guide acquisitions and mergers in the next 24- to 48 months.
TheScore estimates that its home market could grow to $ 5.4 billion, and the Ontario market alone could reach $ 2.1 billion by 2025. Bloomberg, Canadians place more than $ 7 billion in illegal gambling since gambling in the country is primarily limited to horse racing.
Penn National released his 2021 second quarter profits reported Thursday morning, noting $ 1.5 billion in revenue for the quarter.
Snowden appeared on CNBC’s “Halftime” Thursday.