DraftKings will become a public company in '20 through a "three-way business combination" with Diamond Eagle Acquisition and SBTech, according to CNBC's Becky Quick. DraftKings CEO Jason Robins said, "We looked at different options for financing it and this one made a lot of sense because it allowed us to both secure capital up front through a pipe that would then be used to complete the acquisition of SBTech." Robins said the company raised an "additional pipe" of $300M through "several other" investors. Robins: "We also wanted to get public sometime in 2020, ideally, and this allowed us to do both of them in the same transaction as opposed to two separate transactions." As far as '20 projections go, Robins said, "We'll be about $540M in revenue as a combined business next year, and we expect about $3.3B to be the market capitalization upon close." Robins said DraftKings went with the dual-class share structure of the SPAC because "we felt that this was an industry that was going to take lots of twists and turns, and it was really important that the management be able to think long-term." He added, "One of the things that we thought about as becoming a public company is that you don't want to fall into the traps of getting too caught up in quarterly earnings and things like that." On DraftKings' plan for the money it is raising, Robins said, "There's a lot of new states that have recently legalized online sports betting, Michigan just recently, Colorado about a month or so before, so we have a lot of really exciting new markets that we would like to launch, and that requires capital investment" ("Squawk Box," CNBC, 12/23).
