The agreed sale of Light & Wonder’s OpenBet to Endeavor Group has been revalued at two-thirds of its originally proposed value.
The original terms agreed upon between Endeavor and Light and Wonder valued OpenBet at US$1.2 billion, but the two parties have now agreed to a new price for the sportsbook platform provider of US$800m, a 33 per cent decrease on the original value.
The filing did not provide a reason for the price drop, but deteriorating market conditions and falling stocks have affected valuations. Light & Wonder’s stock value has fallen 45 per cent since the announcement of the deal, while Endeavor has fallen 28 per cent.
Light and Wonder note that the amended fee is a “final step” to a streamlined portfolio, providing “a strong valuation in the current market” while increasing the speed and certainty of closing. The conditions for closing have been modified, with Endeavor agreeing to waive the closing condition requiring regulatory approval by the Nevada Gaming Control Board, if required.
The transaction, which will combine OpenBet with IMG Arena, Endeavor’s existing sports betting unit, is expected to close by the end of Q3 2022.
“Endeavor is the right partner for OpenBet and the amended agreement increases speed and certainty by creating a simplified path to closing the transaction while unlocking substantial benefits for OpenBet and Light & Wonder,” said Barry Cottle, President and CEO of Light & Wonder.
“The significant cash consideration from the OpenBet sale will enable us to further de-lever our balance sheet and achieve our targeted net debt leverage ratio range of 2.5x to 3.5x. This transaction is the final step in our journey to streamline our organization as we deliver on our promises as the leading cross-platform global game company.”
Light & Wonder’s statement added that the recently completed US$5.8 billion sale of its lottery business and the pending sale of OpenBet will cumulatively generate approximately US$5.6 billion of estimated net after-tax proceeds as L&W pursues its strategy of streamlining its business.
OpenBet has more than 75 global customers across markets such as the US, Canada, the UK, and Australia and works with 46 sportsbooks across 12 U.S. states and several Canadian provinces.