MGT Capital Investments (MGT) to Sell Fantasy Sports Assets in $7M Deal
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MGT Capital Investments (NYSE: MGT) announced it has signed an Asset Purchase Agreement to sell its daily fantasy sports assets including DraftDay, the third largest operator in the daily fantasy sports industry, together with the MGT Sports business-to-business network. The transaction will provide MGT with approximately $7.0 million in total consideration, including $4.0 million cash; MGT will also retain an equity interest in the new venture (including common stock and warrants), with an initial valuation of up to $3.0 million. Subject to financing and other closing conditions, the Company expects the deal to close before the end of the current quarter.
Random Outcome USA Inc., the new entity formed to acquire DraftDay, will raise funds from investors led by a global investment bank that is a leader in the gaming industry in North America. Following its planned financing, the new business will be managed by Sportech Digital, a subsidiary of Sportech Plc (LON: SPO), one of the world's leading B2B organizations in the sports, gaming and technology sectors, having operated in the regulated gaming sector for over 90 years. Curtiss Wm. Krawetz, CEO of Random Outcome said, "Infusing a leading daily fantasy sports business with the capabilities and resources of an operator of Sportech's caliber creates the dominant business-to-business player in the DFS space."
Rich Roberts, President of Sportech Digital stated, "A focused daily fantasy sports business to be delivered on a B2B partnership basis to the regulated gaming industry has the potential to quickly disrupt the rapidly growing market."
"Today's announcement reinforces our mandate to grow stockholder value," said Robert Ladd, Chief Executive Officer of MGT. "DraftDay could not be going into better hands, and we firmly believe our residual interest will undergo enormous appreciation under Sportech's leadership, relationships and access to capital."
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