May 3 (Reuters) - Better Collective A/S, a Denmark-based company which offers tools and media content to help subscribers place more-informed bets, said on Monday it agreed to buy rival Action Network Inc for $240 million.
“With the acquisition of Action Network, Better Collective gains clear market leadership within sports betting media and affiliation in the U.S. and now expects to increase its revenues in the U.S. to more than $100 million by 2022,” Better Collective said in a statement.
Sports betting deals are rising due to several U.S. states legalizing the practice after the U.S. Supreme Court overturned a federal ban in 2018.
Sports betting generated U.S. revenue of $1.5 billion in 2020, according to a report from research firm Eilers & Krejcik Gaming cited in the Wall Street Journal, and is on track to generate $5.8 billion by 2023.
The deal is expected to be completed in the second quarter of 2021, Better Collective said. It added that Action is expected to achieve revenues of about $40 million in 2021, a rise of over 100% year-on-year.
The purchase price of $240 million will be settled in a cash payment and a $12 million issuance of new Better Collective shares to Action’s management, key employees and some other individuals, according to the statement.
The cash component of the purchase price will be provided through bank financing, the statement said, adding that Action will continue to operate as a separate business unit.
Reporting by Kanishka Singh in Bengaluru; Editing by Lisa Shumaker