On Aug. 9, 2021, DraftKings (DKNG +0.92%) announced that it had entered a definitive agreement to acquire Golden Nugget Online Gaming (GNOG +0.00%). In today's video I share why this acquisition is a strong move for DraftKings. Here are some highlights from the video.
- The acquisition is valued at approximately $1.56 billion in an all-stock deal. The transaction is expected to close by the first quarter of 2022, and the CEO of Golden Nugget will become an active member of DraftKings' board and one of its largest shareholders.
- Golden Nugget will help accelerate DraftKings' growth in the online gambling market, bringing a database of more than 5 million customers. DraftKings intends to cross-sell these users for its sports betting and online gambling products.
- Additionally, DraftKings will also enter into a commercial agreement with Fertitta Entertainment, the parent company of Golden Nugget. This commercial agreement will provide a strong partnership with the Houston Rockets as DraftKings becomes its exclusive daily fantasy sport, sports betting, and online gambling partner, pending state legalization and regulatory approvals.
Click the video below for my full thoughts and analysis.
*Stock prices used were the midday prices of Aug. 9, 2021. The video was published on Aug. 9, 2021.
