Online gaming and betting operator Paddy Power Betfair is staking a claim in the daily fantasy sports market in the US with the acquisition of mobile-focused DFS operator Draft for an initial cash consideration of $19m.
The Draft business, which operates at www.playdraft.com, will continue to be led by CEOs Jeremy Levine and Jordan Fliegel.
In addition to the initial $19m, further cash consideration of up to $29m may be payable over the next four years depending on business performance.
Paddy Power Betfair chief executive Breon Corcoran said: “We are excited to be bringing Draft into the group and to further increase our presence in the US.
“Draft has a differentiated product and we believe the business, with the support of our marketing and technology expertise, can take share in the fast-growing daily fantasy sports market.”
Commenting in the move, Jonathan Buxton, partner and head of consumer and retail at Cavendish Corporate Finance, said: “This deal is Paddy Power’s first venture into the US DFS market.
"The firm is going ahead with the acquisition, despite the fact that it may lead to a three per cent drop in earnings in the immediate future - this reflects the group’s confidence in the potential of this market.
"The transaction is demonstrative of the increasing search for mobile-led, digital companies that are able to cater to the changing habits and needs of customers and could be the first step in the diversification of the group’s offerings.”
