Penn National and Score Media announced that they have completed an agreement that will see Penn National acquire theScore for close to $2 billion in cash and stock.
This agreement, announced August 5, will see theScore’s fully integrated betting and media platform added to the existing ecosystem, creating a one-stop destination for those interested in sports and sports betting across America.
The deal will help bolster Penn National’s Barstool sports betting brand.
Under the agreement, theScore shareholders will receive $17.00 in cash and 0.2398 shares of Penn National common stock for every share of theScore they own. The total price for theScore stock will thus come out to $34 per share based on Penn National’s 5-day volume weighted average trading price as of July 30.
The boards of both companies accepted the agreement unanimously and is subject to customary closing conditions. The deal is scheduled to close in early 2022.
The cash portion of the agreement, which comes out to close to $1 billion, will be financed by cash existing on Penn National’s balance sheet.
“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,” said Penn National CEO Jay Snowden. “Users will enjoy a unique mobile sports betting and iCasino platform with highly customized bets and enhanced in-gaming wagering opportunities, along with highly engaging, personalized sports and entertainment content, and real time scores and stats. We believe this powerful new flywheel will result in best-in-class engagement and retention.”
The integration of Penn National and theScore products should create one of the best products for fans of sports betting and sports in general, with a singular platform to provide for all the needs and wants of this community.
Benefits for Penn National
As it currently stands, the acquisition of theScore by Penn National should prove massively beneficial to the company. Penn National expects an incremental $200 million medium-term adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), as well as $500 million long-term adjusted EBITDA upside following the acquisition.
Penn National will also save on fees and expenses it currently pays for various third-party technology used in its platform, as well as provide a better user experience with theScore’s industry-leading betting and media platform.
The company also remains dedicated to the Canadian betting market and will continue to operate theScore as a standalone business directed towards the Canadian customers. The Levy family will remain in charge of the day to day operations, with the Toronto offices set for an expansion to accommodate the expected growth. theScore brand will remain in place to maintain the confidence of the long-term customers of the betting app.
Penn National also expects to enhance its customer acquisition and retention rates by acquiring Canada’s leading sports betting app. By cross-promoting between Barstool and theScore, the company expects to raise its revenues in the long term.
With the acquisition deal now in place, Penn National is also looking to penetrate new verticals, such as the eSports media vertical, with such expansion greatly helped by ownership of both the Barstool and theScore brands.