Flutter Entertainment has acquired Boyd Gaming’s 5% stake in FanDuel in a deal worth $1.76bn, which values the US sports betting and igaming leader at around $31bn.
Under the terms of the deal, Flutter will pay Boyd $1.55bn for the 5% holding in FanDuel, with the remaining $205m attributable to revised commercial terms between the pair.
Those commercial terms will see Boyd provide Flutter with “significantly reduced market access costs” in Indiana, Iowa, Kansas, Louisiana and Pennsylvania.
The pair first entered into a relationship in 2018 as Flutter gave up a 4% stake in return for market access to an initial 15 states.
Boyd did then have the right to take another 1% ownership in FanDuel. It currently owns 4.5% of actual investor units and warrants to acquire the remaining 0.5%.
The fresh terms run through until 2038, with Flutter stating it will contribute to annual savings of around $65m beginning from 1 July 2025.
Flutter will fund the transaction via additional debt financing, having entered into a definitive bridge credit agreement with certain banks on 10 July.
The deal will provide the New York-listed firm with a senior secured first lien term loan worth $1.75bn.
The operator said its leverage would initially increase, but then reduce due to the “highly visible profitable growth opportunities that exist across the group”.
Flutter’s medium-term leverage ratio target remains between 2x and 2.5x, bosses added.
Other features of the deal will see FanDuel shutter retail sportsbook operations in states where Boyd is live from Q2 2026.
“The revenue and adjusted EBITDA impact of the closure of these operations is not expected to be material,” Flutter said.
Flutter also made reference to the FOX option, whereby the company can exercise an 18.6% equity interest purchase in FanDuel before 3 December 2030.
The price FOX would pay matches the fair value of FanDuel in December 2020, which is $20bn plus a 5% annual escalator, meaning the FOX option price is $4.5bn at the time of writing.
FOX would have to pay in cash and be a licensed gambling company to exercise the option.
From a Boyd perspective, the business said it will use net proceeds from the deal to reduce its existing debt.
Management added the business’ online segment will generate $50m to $55m in operating income and adjusted EBITDAR for the full-year 2025, and around $30m in 2026.
The deal, which is subject to customary closing conditions, is expected to be finalised in Q3.
Peter Jackson, Flutter CEO, said: “Our acquisition of FanDuel in 2018 is one of the most transformational events in our group’s history, with its natural competitive advantages combined with access to Flutter Edge capabilities driving impressive growth to become the well-established and clear leader in US online sports betting and igaming.
“I am really pleased to drive future value for our shareholders by increasing our ownership of FanDuel to 100%. Boyd have been fantastic partners for FanDuel, and we are delighted to be extending our important strategic partnership through to 2038.”
Keith Smith, president and CEO of Boyd, added: “This transaction unlocks the tremendous unrealised value that our investment in FanDuel has created for our company.
“As a result, we are in a significantly stronger financial position to continue executing our strategy of investing in our properties, pursuing growth opportunities, returning capital to our shareholders and maintaining a strong balance sheet.”
The post Flutter snaps up Boyd’s 5% FanDuel stake in $1.76bn deal first appeared on EGR Intel.
New York-listed giant to take full ownership of US market leader, with deal valuing FanDuel at around $31bn
The post Flutter snaps up Boyd’s 5% FanDuel stake in $1.76bn deal first appeared on EGR Intel.