Sportech-managed investment group acquires DraftDay
Random Outcome USA acquires daily fantasy sports operator for $7m
An investment firm managed by Sportech has agreed to acquire US daily fantasy sports (DFS) operator DraftDay and B2B network MGT Sports from MGT Capital Investments for approximately US$7m.
Random Outcome USA, an investment entity formed specifically for the acquisition, will pay an initial sum of $4m in cash, with MGT maintaining a $3m stake in common stock and warrants.
As part of the deal Sportech subsidiary Sportech Digital will now manage the DFS business which was acquired by MGT for $600,000 plus stock options back in April 2014.
DraftDay is widely regarded as the third biggest DFS operator in the US behind the leading pair of FanDuel and Draft Kings, who between them hold a 95% share of the market.
“Infusing a leading daily fantasy sports business with the capabilities and resources of an operator of Sportech’s caliber creates the dominant business-to-business player in the DFS space,” Curtiss Wm. Krawetz, CEO of Random Outcome, said.
On Friday eGaming Review first revealed talks were in an advanced stages between Random Outcome and MGT.
“A focused daily fantasy sports business to be delivered on a B2B partnership basis to the regulated gaming industry has the potential to quickly disrupt the rapidly growing market,” Rich Roberts, president of Sportech Digital, said.
Amaya Gaming had previously been linked with a move for DraftDay but negotiations stalled.