Endeavor Group Holdings, Inc. (NYSE: EDR) is actively seeking buyers for its OpenBet and IMG Arena sports betting data businesses, with OpenBet potentially selling for a significant discount compared to its original purchase price. Endeavor Group CEO Ari Emanuel is finding it necessary to offload OpenBet, which was initially purchased for $1.2 billion from Scientific Games in September 2021, later reduced to $800 million in June 2022. According to a recent report from Eilers & Krejcik Gaming (EKG), OpenBet might fetch as low as $300 million if due diligence reveals that Flutter Entertainment (NYSE: FLUT) could move its business operations in-house.
Although Flutter has not publicly confirmed such plans, it remains a crucial client for OpenBet, alongside other UK-based sportsbook operators. Despite diminished significance in recent ventures, OpenBet still holds a central position in the sports betting infrastructure, powering Flutter’s UK and Australian sportsbooks as well as Entain’s and Evoke’s UK offerings.
The potential discount on OpenBet’s sale is partly attributed to the loss of US business as American operators have begun to internalize their technology stacks. EKG also indicated that the pool of potential buyers for OpenBet is not extensive. Following its $6.3 billion acquisition of Everi (NYSE: EVRI) and International Game Technology’s (NYSE: IGT) global gaming and PlayDigital units, Apollo Global Management (NYSE: APO) might show interest in OpenBet, although this is not guaranteed.
Another possibility for OpenBet’s sale is a management buyout (MBO). Should the executives at OpenBet consider this route, securing the necessary financing might be relatively easy, given the seller’s discount and the business’s strong recurring revenues. However, OpenBet management has remained silent on the possibility of an MBO. In EKG’s view, a private equity firm or fund is the most likely buyer, drawn by the discount and steady revenue streams. Such a transaction could happen within the next month or two, potentially leaving OpenBet largely unchanged in its day-to-day operations.
Endeavor is also looking to sell its IMG Arena sports betting data unit. The potential sale price for this business remains uncertain, with indications that some logical buyers might not be interested. EKG pointed out that it’s difficult to look past fellow data companies Genius Sports (NYSE: GENI) and Sportradar (NASDAQ: SRAD) as potential acquirers. Earlier this month, Genius was linked to merger talks with Sweden’s Kambi Group Plc (OTC: KMBIF), although both parties denied the rumors.
