Betway’s parent company Super Group uncovered its intentions yesterday to start trading publicly on the New York Stock Exchange (NYSE). The gambling giant confirmed it will go through with its plan to go public by merging with the acquisition company Sports Entertainment Acquisition Corp (SEAC). Super Group, which hails from Guernsey, said it has reached a “definitive agreement” to merge its operations with the special purpose acquisition company (SPAC).
Under the new deal, the Guernsey-based betting company will apply for a listing on the NYSE. Super Group intends to trade publicly under the stock symbol SGHC. The SPAC company agreed to merge with Super Group on the basis of a $4.75 billion (£3.42 billion) pre-money equity evaluation. Sports Entertainment Acquisition Corp is listed on the New York Stock Exchange under the ticker SEAH.
Provided there are no redemptions on behalf of SEAC’s shareholders, the merger is expected to bring roughly $450 million in cash to the newly combined business. The existing shareholders of the Guernsey company will have a cut of around 88% in the newly combined firm’s shares. The new group expects to close its initial public offering (IPO) with around $200 million in cash.
In line with the terms of the agreement, stockholders who comprise over 70% of the Guernsey-based company’s equity will not put up any shares for sale. They will transfer all their equity positions to the newly formed public entity.
Super Group Seeks to Expand Its US Footprint
According to Eric Grubman who chairs Sports Entertainment Acquisition Corp, Super Group’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is estimated to exceed $350 million this year. Grubman stressed this figure does not take into account Super Group’s performance in the United States. SEAC’s Chairman said the betting company is unlikely to generate very substantial profits in the US over the next two or so years.
The news of the merger agreement comes shortly after Super Group announced it had sealed a deal to acquire Digital Gaming Corporation and tap the lucrative US sports betting market. The agreement with Digital Gaming will initially secure the Group’s access to ten states. The popularity of online wagering has surged in the US lately, largely as a result of the pandemic-related landbased lockdowns.
Super Group is not the only UK company to eye the US market. Online betting business 888 Holdings PLC revealed last month it was trying to attract the attention of US investors. The Irish bookmaking company Flutter Entertainment is also considering ways to enhance its US footprint.
SPACs like Sports Entertainment Acquisition Corp are shell companies that do not operate commercially. Instead, they exist purely to raise funds through initial public offerings. Also known as blank-cheque companies, SPACs raise said capital for the purposes of acquiring already existing private companies.
Such shell companies have been existing for decades but have grown in popularity in the past couple of years. Over fifty SPACs have been established in the United States in 2020 alone, raising over $21 billion in capital.
- Author
Olivia Cole
