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Market Monitor SPACs to the fore
SPACs to the fore
● The money line ● Market frenzy ● Future-casting
● Pricing in the US story ● SPACs outside the US ?
PART ONE
THE MONEY LINE
The gaming and betting sector ’ s flirtation with SPACs began with DraftKings but not with the deal that eventually took the Boston-based sports betting and DFS operator onto the NYSE in April last year . Instead , the first time a SPAC was associated with the sector came almost a year and a half before the Supreme Court decision on PASPA , when in November 2016 a merger was proposed between DraftKings and DFS rival FanDuel .
The deal , which was eventually nixed by the Federal Trade Commission ( FTC ) in the summer of 2017 , would have been completed by a SPAC organised by the same team that eventually got the DraftKings / SBTech merger through more than two years later .
Speaking during a Duke Business School event in March this year , alumnus Jason Robins explained how DraftKings ’ interest in taking the SPAC route came about .
“ When we first decided to do it in late summer 2019 , everybody thought SPACs were the stupidest thing for people to do ,” Robins told the online audience . “ But the only reason I knew about SPACs was there was this guy called Harry Sloan who I met in late 2015 when I was fundraising , and he said he had this SPAC .”
This was the origin of the nixed merger with FanDuel . “ It worked – we did a deal , but unfortunately it got blocked by the FTC ,” Robins said .
The SPAC idea stuck in his mind , though , and when the potential for a merger with SBTech first came up in the summer of 2019 , it was the obvious route given the advantages of speed to float .
“ I needed to go public to get sources to capital but the timing wouldn ’ t have been right for an IPO ,” he continued .
“ The thought occurred that this was the same SPAC idea . I called up Harry and he loved it . We did a roadshow and raised a PIPE . Having Harry , Goldman Sachs and quality names in the PIPE , we ended up getting it done and now all of a sudden , you can ’ t throw a rock without hitting a SPAC .”
MARKET FRENZY
The buoyancy of the SPAC market in the US when Robins was speaking was obvious from the financial headlines . According to data from SPACInsider , fundraising iGB Market Monitor