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Genius Sports Group Going Public on NYSE After Merging With dMY II SPAC
By Jeff Osienya Oct 28, 2020 IndustryUK-based Genius Sports Group has announced a $1.5 billion merger arrangement with dMY Technology Group II, an NYSE listed blank check company to achieve the goal of becoming a publicly-traded company by Q1 2021.Genius Sports Group, a London-based leader in the supply of sports data and sportsbook technology has announced its plans to go public through a merger deal with dMY Technology Group II, a special purpose acquisition company (SPAC) listed on the York Stock Exchange (NYSE). According to a statement released by both companies, the deal puts the value of Genius Sports at $1.5 billion, or 8.0x the $190 million revenue that Genius is projected to generate in 2021.
The dMY SPAC is led by Harry You, the former executive of EMC Corp, and Niccolo de Masi the current chairman and former Chief Executive Officer of Glu Mobile Inc. Based on the arrangement that the two companies have, after the transaction is completed Genius Sports will start trading on the NYSE where the SPAC - or blank check company as such firms are popularly called, is already listed.
As part of the deal, stakeholders of both companies will be exchanging their current shares for shares in NewCo, the brand-new company that will be listed publicly on the NYSE. After closing the deal, the merged company will start trading under the ‘GENI’ ticker symbol.
Breaking Down the Transaction that Will Take Genius to the NYSE
Sources close to the matter indicate that DMY has been meeting with institutional and industry investors over the past three months to discuss the subject of raising at least $300 million in fresh equity to assist with the financing of the merger with the UK betting data company. The boards of both firms had also approved this merger unanimously, and the deal is expected to be sealed by Q1 2021, of course, subject to a specific set of conditions.
dMY plans to set aside $276 million in a trust account, assuming none of the public stockholders of dMY will redeem their stock positions. And from the earlier talks of raising funds, some institutional and industry investors have already committed to taking part in the transaction via a private investment in public equity (PIPE) at the cost of $10 for every share – to raise another $330 million. The $330 million collected from the PIPE fundraising transaction will then be used to compensate shareholder loans and other payments for corporate shareholders.
At closing, NewCo is expected to have about $150 million in monetary cash reserves that aren’t earmarked for any specific use, and a balance sheet that’s free of debt.
Mark Locke to Stay on the Steering Wheel After Public Listing
Even though the transaction is planned for completion next year, 2020 has seen a lot of gaming companies seek public listing through blank check companies. So far, Skillz Inc, Rush Street Interactive, Golden Nugget, and DraftKings have sidestepped the IPO roadmap and Genius Sports is now following suit.
After the merger is done and dusted, Mark Locke, the current Chief Executive Officer of the Genius Sports Group will retain his mantle as CEO of NewCo, and he will be flanked by a talented top brass of gurus in the sports betting, technology, and finance industries. Harry You and Niccolo de Masi will be part of the Board of Directors of the combined company.
Upon the announcement of the merger with dMY to pursue a spot on the NYSE, Mr. Locke released the following statement to voice his excitement;
Quote"Genius Sports Group created the market for official data across all tiers of sports, helping fuel our sportsbook partners' ever-increasing range of products," … "This transaction will help us continue to expand and strengthen our position as a nexus of the global sports betting, and media ecosystem."
Mr. de Masi also had a few words to say about the new merger as follows;
Quote"Elemental data provider Genius Sports Group benefits from the growth of all participants in the global sports betting market. Mark Locke has pioneered the provision of official rights and live data which have been instrumental in building the modern sports betting market,"… "The company has a strong track record of growth and we are very excited by the opportunities for further expansion in this rapidly growing segment."
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