In its bid to expand in the fast-growing North American sports betting market, Penn National Gaming announced on Thursday that it has entered into an agreement to acquire Score Media & Gaming Inc. for $1.74B in cash and stocks.
Under the deal, Penn will pay Score Media shareholders $34 per share in a mix of cash and stocks. Score owners will get $17 in cash plus .2398 shares of Penn National common stock per Score share. Once the transaction is consummated, Penn National will own approximately 93% of Score Media’s outstanding shares.
The transaction has been unanimously approved by the boards of directors of both companies and is expected to close during the second quarter of 2022.
Said Penn National Gaming Chief Executive Officer Jay Snowden in an interview:
“There’s so much that theScore does that is so complementary with what Penn does and Barstool does. You put it all together and there’s so much synergy for the future in terms of revenue growth.”
Goldman Sachs and Code Advisors will provide financial advice to Penn National, with Wachtell, Lipton, Rosen & Katz and Blake, Cassels & Graydon acting as the company’s legal counsel. Score is receiving financial advice from Morgan Stanley and Canaccord Genuity Group, and legal services from Paul, Weiss, Rifkind, Wharton & Garrison and McCarthy Tétrault.
No.1 Sports App in Canada
Penn National and Score Media have a strategic partnership going on since 2019. The latter’s media app called theScore is the number one sports app in Canada and the number 3 ranked mobile app of its kind in North America.
Score media traces its roots in the television industry with a cable channel that was known as The Score. However, it could not overtake its two rival Canadian TV networks and Chief Executive Officer John Levy opted to bet his company’s future on digital assets. He sold the TV license in 2012 and focused on a sports website and a mobile app, then later moved into sports betting.
Penn’s Stock Rises
Following Thursday’s announcement by Penn Gaming, its stocks rose up to 11% to $73.43, the most since January. Meanwhile, Score went up by as much as 83% to $33.16 in New York, its most intraday trading since May 2018 when the U.S. Supreme Court repealed the Professional and Amateur Sports Protection Act.
Penn National, which purchased a 36% ownership share in Dave Portnoy’s Barstool Sports last January 2020, had seen its stocks decline in recent months amid the shortage of sporting events and as the company struggled to gain market share in recently legalized sports betting markets in Pennsylvania and Michigan.