Publication date: May 6, 2021, 10: 03 h.
Last updated: May 6, 2021, 02: 38 h.
Sportsradar and Horizon Acquisition Corp. II (NYSE: HZON) are reportedly extending negotiations to get the deal to the finish line. Horizon is a special purpose acquisition company (SPAC) looking to merge with a bookmaker data provider.
It has long been rumored that the Swiss company is looking to go public. This could be 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 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 with institutional investors and unidentified sources cited by Sportico say the deal could be announced in the coming 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. However, Horizon and Sportradar came in first.
However, that's not the reason both parties 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) recently spun off its checking partner. And the stock is down 10. 45 percent over the past week. Genius Sports is a major rival to Sportradar.
Genius was valued at $1.5 billion after its merger with SPAC dMY Technology Group, Inc. II, which has sparked 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 is also the fact that many companies taken public by SPACs have little to show for it in terms of business plan or revenue, in some cases triggering shareholder lawsuits from disgruntled investors, "Harvard says. "Meanwhile, SPAC success stories, such as fantasy sports betting company DraftKings and sports betting company Clarivate Analytics, are relatively few in number."
A study by scholars at the European Institute of Corporate Governance, New York University, Stanford and Yale indicates that shares of most firms without SPACs fall after a merger.
Sportradar still has advantages
While the broader historical performance picture after SPAC 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. That means it has plenty of room to grow in the world's fastest-growing sports betting market.
Additionally, as sports betting operators look to offer a broader betting menu, including in-game betting, data and live streaming, offerings from companies like Genius and Sportradar are gaining additional prominence.
This can lead to more revenue opportunities.