Pennsylvania-based Penn National Gaming has reached a definitive agreement to acquire Canadian digital media and sports betting company theScore for approximately $2 billion USD, in a cash and stock deal.
The transaction, which has been unanimously approved by the boards of both companies, remains subject to customary closing conditions, including approval of the shareholders of theScore and the approval of applicable gaming authorities. The acquisition is expected to close in the first quarter of 2022.
“With Penn’s support, we will continue to invest in building our Canadian operations, growing our footprint and expanding our workforce,” said John Levy.
Penn National intends to operate theScore as a standalone business that will continue to be led by theScore’s founder, chair, and CEO John Levy and his son Benjie Levy, who is its president and COO. The American gaming company said it was attracted to theScore, in part, given its access to Canadian engineering and tech expertise, adding that it plans to leverage Canada’s strong tech talent pool to expand theScore’s Ontario team.
“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,” said John Levy. “With Penn’s support, we will continue to invest in building our Canadian operations, growing our footprint and expanding our workforce.”
Founded in 2012, theScore provides sports news and statistics to users via its mobile app, which has approximately four million monthly users. The Toronto-based company currently trades on the TSX and the Nasdaq under the symbol ‘SCR.’ According to Yahoo Finance, theScore has partnered with Penn National since 2019, permitting theScore to access sports betting licences in states where Penn operates casinos and racetracks.
Penn National is an omnichannel provider of retail and online gaming, live racing, and sports betting entertainment. The company, which is traded on Nasdaq under the symbol ‘PENN,’ owns 43 regional gaming properties across 20 states, operating under brands like Hollywood, Ameristar, and L’Auberge. Penn National also operates online social casino, bingo, and iCasino products, and owns a major stake in Barstool Sports.
The directors of theScore, John Levy and Benjie Levy, and significant shareholder Relay Ventures have agreed to support the deal. Collectively, the group holds 30 percent of theScore’s existing voting shares.
The cash portion of the deal consists of about $1 billion USD, which Penn National plans to finance using existing cash on its balance sheet. The acquisition is set to give theScore shareholders $17 USD in cash and 0.2398 shares of Penn National common stock per theScore share. Following the close of the deal, current Penn National and theScore shareholders will hold approximately 93 percent and seven percent of the company’s outstanding shares, respectively.
The news follows theScore’s March initial public offering on the Nasdaq, through which it raised $186 million USD, and comes as the Canadian government is set to legalize single game sports betting through Bill C-218, The Safe and Regulated Sports Betting Act.
Recently, theScore has set its sights on expanding its sports betting app across the US. Today, theScore Bet is available in New Jersey, Colorado, Indiana, and Iowa. However, amid a competitive American market dominated by larger players, the app has reportedly struggled to establish market share.
Penn National said its proposed acquisition of theScore establishes the company’s “strong” commitment to Canada. Following its close, theScore will continue to use its existing app and brand and remain headquartered in an expanded Toronto office.
“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,” said Jay Snowden, Penn National’s president and CEO. “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.”
Snowden said a key part of the deal involves gaining access to theScore’s player account management system and the in-house, managed risk and trading service platform the company is currently finalizing. Snowden said this will broaden Penn National’s product offerings and lead to “significant savings” in third-party platform costs.
Snowden also said Penn National was attracted to theScore’s “deep pool of product and engineering talent and data-driven user analytics.” The deal also accelerates Penn National’s strategy to enter into new verticals like esports.
Benjie Levy said the deal bolsters theScore’s ability to grow its North American presence, adding that it also “primes us even further to capitalize on the huge upcoming betting opportunity in our home country.”
Feature image from Wikimedia Commons