Penn National to Acquire Score Media & Gaming for Over $2 Billion
August 5, 2021
In a major deal for the sports betting and media landscape, Penn National Gaming and Score Media and Gaming have announced in a joint press release that the two companies have entered into an agreement that will see Penn National acquire Toronto-based theScore for over $2 billion in cash and stock.
The transaction has been unanimously approved by the boards of directors of both companies and is currently expected to close in the first quarter of 2022.
Upon completion of the transaction, current Penn National and theScore shareholders will hold approximately 93 per cent and 7 per cent respectively, of the company's outstanding shares. Penn National expects to fund the approximately $1.2 billion cash portion of the consideration using existing cash on its balance sheet.
Penn National says that it believes the Canadian gaming market represents "a compelling opportunity" for growth. It intends to operate theScore as a standalone business, headquartered in an expanded Toronto office, and will continue to utilize ‘theScore’ app and brand. It adds it was attracted to theScore, in part, for its ready access to a deep pool of Canadian engineering and technology expertise, and Penn National expects to leverage Canada’s world-class technology talent pool to expand theScore’s engineering and production workforce based in Ontario as the business scales.
The company adds that not only will the acquisition reinforce its position at the epicentre of sports, media, gaming, and technology, but will also accelerate its strategy to enter into other verticals that leverage the Barstool and theScore brands and consumer appeal such as the esports media market.
Jay Snowden, President and Chief Executive Officer of Penn National, said: “We are thrilled to be acquiring theScore, which is the number one sports app in Canada and the third most popular sports app in all of North America [with a] unique media platform and modern, state-of-the art technology... We are now uniquely positioned to seamlessly serve our customers with the most powerful ecosystem of sports, gaming and media in North America, ultimately creating a community that doesn’t currently exist. Users will enjoy a unique mobile sports betting and iCasino platform with highly customized bets and enhanced in-gaming wagering opportunities, along with highly engaging, personalized sports and entertainment content, and real time scores and stats. We believe this powerful new flywheel will result in best-in-class engagement and retention."
Snowden added that an important piece for Penn National is that theScore's state-of-the-art player account management system and under-construction managed risk and trading service platform will allow Penn National to take full control of its own tech stack. That, in turn, should lead to greater control over its product development roadmap, reduced costs, and an enhanced customer experience. Penn National also says the increased cross-promotion ecosystem between theScore and its Barstool brand is expected to lead to higher revenue.
theScore is the third-largest sports app in North America and number one in Canada, with highly engaged users spending 113 minutes per month in-app, according to the release. It currently operates its theScore Bet brand in New Jersey, Iowa, Indiana, and Colorado. According to the press release, theScore Bet users with theScore media app compared to theScore Bet users who do not have theScore media app produce 88 per cent higher handle/user, place three times the number of bets per user, and generate a 91 per cent increase in day 30 retention.
John Levy, Chairman and Chief Executive Officer of theScore, added: “This deal brings together two companies that share a vision for how media and gaming intersect, and we could not be more excited to join the Penn National family. I’m proud of theScore team and all of our accomplishments, and believe the time is right to take the next step and align with a company in Penn National with the resources and scale to accelerate our business. We are excited to join forces with Penn to form the most powerful media and gaming company in North America.
“We’ve built an innovative, technology-led integrated media and gaming business that has us poised for success across North America, including the highly anticipated upcoming rollout of commercial sports betting in Canada. With Penn’s support, we will continue to invest in building our Canadian operations, growing our footprint and expanding our workforce."