Betting firm Paddy Power Betfair has "trodden new ground after snapping up" a U.S.-based fantasy sports start-up, according to Bradley Gerrard of the London TELEGRAPH. The Irish-based business, which is listed in London, paid $19M for Draft, an early-stage online company which "enables customers to win money from the ‘fantasy’ team of players they create within a given sport, such as American football or ice hockey." Paddy Power said that Draft's revenue had "grown rapidly in recent years" in a market which made more than $300M in revenue in '16 and the "amount it ends up paying for the business could rise" by $29M -- meaning a total price of $48M -- in the next four years "depending on the performance of the business." Draft will continue to be run by co-CEOs Jeremy Levine and Jordan Fliegel, who "will have access to their new parent company's marketing and technological might" (
TELEGRAPH, 5/10). In London, Dominic Walsh reported analysts "welcomed the deal as a useful diversification into a potentially lucrative new sector" that would also boost Paddy Power Betfair's exposure in the American market. Barclays analyst Patrick Coffey said that the move "could presage further deals for Paddy Power Betfair, mooting the acquisition as a potential solution to the group’s underperforming gaming division." He said that the Draft purchase "would not put much of a dent" in the group’s estimated net cash pile of £222M ($286.1M) (
LONDON TIMES, 5/11).
