Shares of Score Media and Gaming, which operates theScore, were up quite 60% Thursday morning after Penn National announced it’s acquiring the corporate for $2 billion in cash and stock options. Shares of Penn National were down 2% after markets opened. The deal increases Penn National’s reach in North America since Score Media and Gaming has positioned itself to leverage the Canadian mobile sports betting marketplace.
Penn National said Score Media and Gaming shareholders will receive $17 in cash and 0.2398 shares of its common shares for every theScore share, bringing the entire share price to $34.00. Penn National estimates the acquisition will provide adjusted EBITDA growth in two years, an incremental $200 million medium-term adjusted EBITDA, and $500 million of incremental long-term adjusted EBITDA upside.
Goldman Sachs and Morgan Stanley served as advisors within the transaction. Penn National also backs the Barstool Sports app, which it purchased in 2020 for $450 million. during a statement, Penn National CEO Jay Snowden said theScore acquisition allows the corporate to get the company’s in-house technology. That that “should cause significant savings in third party platform costs and permit us to broaden our product offerings – providing the missing piece for operating at what we expect to be industry-leading margins.
“In addition to the synergies, we’ll be gaining access to theScore’s deep pool of product and engineering talent and data-driven user analytics, which can help drive our customer acquisition, engagement, retention strategies, and cash flows,” he added. TheScore transitioned into its role as a digital-based outlet in 2012 when it sold its broadcast business to Rogers Communications for $167 million. It built a sports gaming and media division and attempted to leverage its mobile app user base into a competitive sports betting business. the corporate launched theScore Bet app for mobile wagers in 2019, and this year made its debut on the Nasdaq. While discussing theScore’s future last March, Chris Lencheski, the chairman of personal equity consulting firm Phoenicia Lencheski, warned the dollar average to accumulate a replacement customer would begin to weigh down firms with little capital and would drive acquisitions and mergers over subsequent 24- to 48 months.
Score Media and Gaming estimates its home market can grow to $5.4 billion, and therefore the Ontario market alone could reach $2.1 billion by 2025. consistent with Bloomberg, Canadians place over $7 billion in illegal wagers since sporting gambling within the country is especially limited to racing . Penn National released its 2021 second-quarter income statement on Thursday morning, noting $1.5 billion in revenue for the quarter. Snowden is scheduled to seem on CNBC’s “Halftime” on Thursday.
