Playing the Odds

Playing the Odds

Uncertain times add an extra layer of complexity and risk to business decisions and transactions. During these times, our multi-disciplinary teams work closely with clients to navigate and resolve the most challenging situations, drawing on our deep experience across corporate, regulatory and litigation practice areas.
 
Client DraftKing’s deal to create the world’s first vertically integrated sports betting and online gaming company was complicated well before the coronavirus outbreak. It involved a three-way merger between DraftKings, the leading daily fantasy sports and iGaming company, SBTech, a technology provider for sports betting and online gaming brands, and Diamond Eagle Acquisition, a special purpose acquisition company (SPAC). The proposed deal spanned multiple jurisdictions. The group would be one of the latest to go public through a SPAC, raising money and listing shares without conducting a conventional initial public offering. As part of the deal, private investments in public equity (PIPEs) raised more than $300 million for the new company to supplement the more than $400 million held by Diamond Eagle.
 
Then the world seemed to stop. The coronavirus pandemic made an already complicated deal even more daunting. Spectator sporting events—the driving force behind DraftKings’ growth—were cancelled, regulatory approvals became complicated, cybersecurity and ransomware threats became a growing concern and funding was needed, among other obstacles.  
 
S&C’s M&A and Capital Markets teams helped DraftKings overcome these challenges, and interest in the digital company remained strong. Against the odds DraftKings went public in April, with early trading far exceeding expectations.
 
The result is one of the latest examples of our M&A and Capital Markets teams delivering for our clients. Read more about the DraftKings deal here.