Super Group Holding Co, owner of Betway and Spin, is going public with a SPAC deal to bring the global online sports betting and casino company public.
Betway is an online sports betting company, and Spin is a multi-brand online casino.
The SPAC merger values Super Group Holdings at a pre-money equity valuation of $4.75 billion.
Shares will trade as SGHC on the NYSE after the merger is complete. Current shareholders of Sports Entertainment Acquisition will own 9.3% of the new company.
About Super Group: Super Group is licensed in 23 jurisdictions across Europe, the Americas and Africa. The company says it can scale into new markets and has proprietary marketing and data analytics to improve the customer experience.
The company had over $42 billion worth of wagers in the 12-month period ending March 2021. The company says it has over 2.5 million monthly unique active customers.
Super Group’s Betway brand has become well-known around the world with over 60 brand partnerships. Betway is a partner with the Chicago Bulls, Golden State Warriors, Brooklyn Nets and Los Angeles Clippers in the National Basketball Association.
Betway is also a brand partner of the English Premier League team West Ham United and eSports team Ninjas in Pyjamas.
Growth Ahead: One of Super Group’s biggest pushes is to expand into the fast-growing U.S. online sports betting market. The company has entered into an agreement with Digital Gaming Corporation for the rights to 10 U.S. states.
Among the 10 states are Pennsylvania, New Jersey, Colorado, Indiana and Iowa, which have all legalized online sports betting. The first U.S. bet under the partnership was taken in March.
Super Group and Digital Gaming Corporation are working to add additional licenses outside the initial 10 states.
Additional growth could come from mergers and acquisitions, according to the company’s presentation. The company will look to add companies with high value technology stacks, and business-to-consumer online casino and sports betting companies.
Related Link: 6 Sports SPACs To Consider For Your Investing Playbook
Financials: At close of the SPAC deal, Super Group will be debt free and have over $200 million in cash.
The company had net gaming revenue of $1.1 billion in 2020 and EBTIDA of $259 million on a pro forma basis. Revenue in 2020 was split with 48% in the Americas, 21% in Europe, 12% in Africa and 18% in other regions.
Super Group is estimating net gaming revenue of $1.6 billion in fiscal 2021 and $1.8 billion in fiscal 2022. EBITDA estimates are $350 million in fiscal 2021 and $420 million in fiscal 2022.
Super Group is estimating compounded annual revenue growth of 23.1% from fiscal 2020 to fiscal 2022 compared to 20.2% for Flutter Entertainment (OTC: PDYPY) and 50.9% for DraftKings Inc (NASDAQ: DKNG). Super Group has EBITDA margins of 23.6%, beating Flutter’s 21.3% and the negative 23.1% from DraftKings.
The SPAC deal values Super Group at 2.6x estimated fiscal 2022 revenue. Flutter Entertainment and DraftKings shares trade at 4.8x and 14.9x this valuation respectively.
Price Action: Shares of Sports Entertainment Acquisition Corp closed at $9.83 on Friday.
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