Betway Owner Agrees £3.6bn SPAC Merger
Super Group, the parent company of Betway, has agreed to a special purpose acquisition company merger (SPAC). When complete, the merger will boost cash reserves by £200m.
Betway’s proposed US expansion plans have been boosted by the news that parent company Super Group have agreed to a SPAC merger with Sports Entertainment Acquisition Corporation (SEAH).
The £3.6m ($5.1bn) deal will enable the Super Group business to go public and value the listing at £2.9bn ($4.75). As part of the deal, the group will receive a cash injection of £323m in funds currently held in trust. Super Group’s existing shareholders will hold 88% of the shares on completion, and the deal will see $200m in cash on the balance sheet and will wipe out any debt or liabilities the group has. Shares in the new entity will trade under the name of Super Group and will be traded on the New York Stock Exchange.
70% of existing shareholders have agreed not to sell any of their shares, and these equity positions will roll these interests into the new publicly listed company.
The deal is expected to close later this year, pending a vote by Sports Entertainment Acquisition Corporation’s shareholders.
Super Group’s expansion in the American market has gathered pace in recent months, and in a separate deal, the company agreed to acquire Digital Gaming Corporation. The finances have not been disclosed on this purchase, but it enables the Betway brand to build on an existing deal with the company. The purchase will give Betway access to an additional 10 US states.
Once the merger is complete, former NHL executive vice president Eric Grubman will take the lead of the business, while former NHL COO will join the board of directors.
Super Group CEO Neal Menashe said: “Becoming a public company will give us the tools to continue to grow our leading product and technology offering and deliver a strengthened brand-driven marketing strategy.
“This listing will position us strongly to capitalise on the significant global growth opportunities ahead ‒ including in the US market ‒ enabling us to further expand our robust, loyal and engaged customer base.
“In Eric and John, we have found the perfect partners with expertise across sports, entertainment and public markets to help us navigate our next phase of growth,” Menashe added.
News of the merger and the listing of the company has been received positively by industry insiders. Regulus Partners analyst Paul Leyland said: “Super Group has a proven multi-market growth model and has recently shifted into very strong cash generation.
“The majority of Super Group’s larger markets are getting more complex, more competitive and could have some legislative stings in the tail.
“The unwinding of Covid-19 policy impacts is also likely to put pressure on some of the operating margin benefits seen recently by a number of operators (additional fixtures, strong sports margins, higher consumer interest, less advertising.
“However, a broad portfolio and strong in-house capability should allow Super Group to weather these issues. “Perhaps most reassuringly from a resilience perspective, after a swathe of M&A-led or projection-led scale, the latest gambling business to go public is a highly successful organic growth business with a broad revenue base and proven cash generation,”