European gambling operator Allwyn International announced the acquisition of a 62.3% majority stake in the American daily fantasy sports platform PrizePicks for $1.6 billion, valuing the company at $2.5 billion. The transaction was financed through a $1.64 billion term loan and is expected to be completed in the first quarter of next year. The current management team of PrizePicks will continue to operate independently, and if performance targets are met, the enterprise value could increase to $4.15 billion. This acquisition is another strategic move by Allwyn following the merger with OPAP and the establishment of a digital division, aimed at expanding its business footprint in the US market.
Acquisition Details and Financing Arrangements
Allwyn financed the acquisition through a $1.64 billion term loan (Tranche B loan), paying $1.6 billion in cash for a 62.3% controlling stake in PrizePicks, corresponding to a company valuation of $2.5 billion. The deal includes performance-based clauses, with the potential to increase the enterprise value to $4.15 billion if PrizePicks meets specific targets over the next three years. The acquisition is expected to be completed in the first quarter of 2025, subject to customary closing conditions. PrizePicks CEO Mike Ybarra and the existing team will remain in place and retain a portion of the equity to continue operating independently.
Business Impact and Integration Plans
Allwyn states that acquiring PrizePicks is a significant step in its entry into the US daily fantasy sports market. Although the company's third-quarter performance was affected by sports event outcomes causing fluctuations in gambling profit margins, the overall trend remains positive through balancing multiple business segments, including lotteries. PrizePicks will operate as an independent brand, developing in coordination with Allwyn's newly established digital division, led by former Betfred USA CEO Kresimir Spajic, focusing on digital transformation.
Strategic Background and Future Development
This acquisition is part of a series of recent strategic initiatives by Allwyn. In October 2023, Allwyn International reached a merger agreement with Greek operator OPAP, planning to form a lottery and gambling group valued at approximately €16 billion, with plans to list in London or New York. The company also sold its land-based casino assets in Germany and Australia, while acquiring the remaining shares of Greek operator Stoiximan. These moves demonstrate Allwyn's strategy of optimizing its global business structure through mergers and acquisitions, strengthening its competitiveness in the digital gambling sector.
