DraftKings buys into $1.95bn Vivid Seats SPAC merger
Todd Boehly-backed investment firm nets support from US sports betting heavyweight for PIPE investment deal
DraftKings has agreed to make a PIPE (private investment in private equity) investment into the $1.95bn SPAC merger between online ticketing company Vivid Seats and Horizon Acquisition Corp.
The agreement will see DraftKings assume a portion of a previous commitment made by a third company, Eldridge Industries LLC, as part of the initial SPAC investment, first announced in April.
Vivid Seats’ merger with Horizon will see an influx of $795m in investment capital from a number of individual and institutional investors and values the combined business at $1.95bn.
The exact amount of the commitment DraftKings will assume has not been disclosed.
Eldridge Industries LLC is owned and operated by Los Angeles Dodgers and Lakers owner Todd Boehly, who also owns stock in DraftKings.
As part of the investment, Eldridge has agreed to give DraftKings the option to sell its Vivid Seats shares to Eldridge on the day after the first anniversary of the closing of the Horizon/Vivid Seats merger.
Pricing will be set at $9.77 per share, based on DraftKings continuously holding its Vivid Seats shares until this date and other terms and conditions being met.
DraftKings CEO Jason Robins cited the potential for future cross-sell opportunities between the two firms following the agreement.
“Like DraftKings, Vivid Seats is a technology-driven company aligned very closely with our customer-centric business model,” Robins explained.
“We look forward to exploring future marketing and promotional collaborations with Vivid Seats that further enhance DraftKings’ ability to offer an unmatched consumer experience,” he added.
Founded in 2001, Chicago-based Vivid Seats operates an online ticketing business, with partners including ESPN, Rolling Stone, and the Los Angeles Clippers.
The company has its own in-house proprietary platform software and technology which includes a mobile app and desktop ticket booking site.
Addressing his own role in the investment agreement, Boehly echoed Robins’ comments about the potential for collaborative opportunities between DraftKings and the Vivid Seats business.
“As an investor in both DraftKings and Vivid Seats, we are excited about the strategic benefits that both firms can derive from working with one another and are happy to stand behind DraftKings’ investment for a limited period to help enhance their relationship,” said Boehly.
Boehly’s Horizon Acquisition Corp was previously linked as a suitor for Sportradar and held constructive discussions over a SPAC deal earlier this year.
However, Horizon would later walk away from the deal, with Sportradar since pursuing an IPO, which the firm completed in September.