Date published: May 6, 2021, 10: 03 hrs.
Last updated: May 6, 2021, 10: 03 h.
Sportsradar and Horizon Acquisition Corp. II (NYSE: HZON) - a special purpose acquisition company (SPAC) seeking a merger with a betting data provider - are reportedly extending negotiations to bring the deal to the finish line.
Rumors have long circulated that the Swiss company is looking to go public - either through a traditional initial public offering (IPO) or a blank check transaction. In March, rumors surfaced that Horizon Acquisition Corp. II of Todd Boehly was in talks with Sportradar and that a deal valuing the bookmaking data provider at $10 billion was imminent.
More than two months later, no such agreement has been reached, but both sides are beginning to share private financial data institutional investors and unidentified sources cited by Sportico say the deal could be announced in the next few days.
SPACs have two years to find a merger partner or risk liquidation. Horizon Acquisition Corp. II, of which DraftKings co-founder and CEO Jason Robins is a board member, raised $ 525 million in an initial public offering last October.
Sportsradar, SPAC have momentum to make a deal
A typical negotiation timeline between a blank check company and a merger partner can take up to eight weeks at the highest level - one that was beaten by Horizon and Sportradar.
However, that's not a reason the two sides may want to make an official announcement. Rather, Horizon and Sportradar may want to capitalize on the enthusiasm for SPAC sports betting before those good vibes dry up.
Genius Sports (NYSE: GENI) - Sportradar's main rival - recently separated from its blank check partner - and the stock is down 10. 45 percent over the past week.
Genius was valued at $1.5 billion in conjunction with SPAC dMY Technology Group, Inc. II, prompting speculation that $'s $10 billion valuation on Sportradar is rich. It's not just Genius that could drive Horizon and Sportradar to the finish line. It could also be the growing criticism of the SPAC deal.
There's also the fact that many companies SPACs take public have little to show for it in terms of business plan or revenue, in some cases triggering shareholder lawsuits by disgruntled investors, "Harvard says. "Meanwhile, successful SPACs, such as fantasy sports betting firm DraftKings and sports betting firm Clarivate Analytics, are relatively few in number."
A study by researchers at the European Institute of Corporate Governance, New York University, Stanford and Yale indicates that the share of most firms without SPACs falls after a merger.
Sportradar still has advantages
While the broader historical take on post-SPAC performance isn't pretty, that doesn't mean Sportradar will succumb to the trend.
The company, whose clients include FIFA, Major League Baseball (MLB), NASCAR, NFL, NBA and NHL, generates just six percent of its revenue in the US, indicating it has plenty of room to grow in the world's fastest-growing sports betting market.
Additionally, with sports betting operators looking to offer a wider selection of bets, including in-game betting, data versus live streaming offered by companies like Genius and Sportradar takes on added importance. This can lead to greater revenue opportunities.