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New SPAC eyes potential acquisition worth up to £1.53bn

written by Bella Palmer
spac

Tekkorp intends to acquire a digital media entertainment or leisure company

A new special purpose acquisition company (SPAC) is looking to potentially make an acquisition in the gambling space worth up to £1.53bn ($2bn).

The head of the SPAC, called Tekkorp Digital Acquisition Corp., is the former CEO of digital games supplier NYX and Scientific Games, Matt Davey. Tekkorp began trading on the Nasdaq on Thursday and plans to raise as much as £263.38m ($345m) from its IPO.

Las Vegas-based Tekkorp outlined in its S1 SEC filing that its intention is to acquire a company that is in the digital media entertainment, sports, leisure, and/or gaming industries.

The different types of businesses this acquisition might cover includes operators, affiliates, sports data providers, and B2B suppliers. For this acquisition, the company is looking at “an enterprise valuation between £0.76bn and £1.53bn ($1bn and $2bn).”

The SEC filing referred to the similarities between the digital gaming market in the UK and the burgeoning US market. The SPAC believes that a similar level of digital penetration is achievable in the United States.

The filing went on to explain how the digital gaming market in Europe has generated low-level double-digit growth over the past decade. Looking at demand in the US to date, Tekkorp believes that US digital gaming companies could see higher double-digit growth each year as the market continues to expand.

A number of other notable gambling industry names have a role in Tekkorp Digital Acquisition Corp. The company’s president is former Fox Bet and The Stars Group executive Robin Chhabra. Ex-CFO of NYX Eric Matejevich is on board as the CFO of the company, while CEO of Caesars Entertainment Tony Rodio received a director nomination.

Over the past year, there have been a number of high-profile mergers in the US gambling space. A merger between DraftKings, gambling technology supplier SBTech, and a SPAC called Diamond Eagle Acquisition Corporation enabled DraftKings to go public in April through a reverse merger.

In May, The Stars Group and Flutter Entertainment completed a merger worth £10.84bn ($14.2bn), resulting in Flutter Entertainment becoming the largest online gambling group in the world.

Casino companies Caesars Entertainment and Eldorado Resorts merged in July in a deal worth approximately £13.21bn ($17.3bn). Caesars Entertainment is also set to acquire UK-based William Hill in a deal valued at £2.9bn ($3.8bn).

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