Posted: November 30, 2021, 10: 52 NS.
Last updated: November 30, 2021, 07:19 NS.
Sports Entertainment Acquisition Corp. (NYSE: SEAH), a special purpose acquisition company (SPAC) that merged with Betway's parent company Super Group, has received praise from the sell side. This shows some enthusiasm for what is likely to be one of the biggest blank check transactions in the fourth quarter.
In today's client note, benchmark analyst Mike Hickey gave a "buy" rating and $.We will start reporting on the acquisition of Sports Entertainment at. It means the upside of the price target. 45 Percentage from the closing price on November 29th. That coverage is transferred to supergroups when it comes to stand-alone public enterprises. The blank check transaction is expected to close this quarter and game operators will trade on the New York Stock Exchange under the ticker "SGHC".
Analysts note that Supergroup's "profitable" internet platform and a practical approach to gaining market share in new markets are "the secret to winning continuous success" and online worldwide. We anticipate continued growth in the gaming market.
When the blank check transaction was announced in April, Betway's parents stated that the transaction had a pre-stock valuation of $ 4. 75 billion. This shows that the merger of supergroups and sports entertainment is one of the biggest combinations ever between SPACs and gaming companies.
Why you believe Hicky is right
Analysts and investors are increasing their scrutiny of balance sheets and financial strength as the stocks of so many deSPACed companies, including some in the gaming industry, are down.
Supergroups are on the market at a time when their enthusiasm for SPAC trading games is diminishing, but there is reason to believe that Hicky's bullish reputation is justified. As mentioned above, the company is profitable and unusual among online sportsbook operators.
Supergroup forecasts $ 1.5 billion in net game revenue (NGR) this year, with interest, taxes, depreciation and pre-amortization profit (EBITDA) of $.
is. a million. These numbers are expected to rise to $ 1.7 billion and $ 420 million next year, respectively.
After signing the deal with Sports Entertainment, Supergroup will have $ $ 85 million in cash on its balance sheet and no debt.
Inside a supergroup dissertation
For investors, the potential source of Super Group's appeal is that the company is not aiming to expand Betway to the level of FanDuel or DraftKings in the United States. This simply means that you don't want to participate in a cash-wasting spending war just to gain market share.
Still, operators have US growth plans. When the blank check deal was announced, Supergroup also said it would acquire Digital Gaming Corporation (DGC). Purchasing DGC provides maximum additional market access. ) States including Colorado, Indiana, Iowa, New Jersey, and Pennsylvania, which, according to the company, may be applicable to both iGaming and sports betting.
Malta-based Betway has more than brand contracts with athletes, leagues and teams around the world. In the United States, such agreements include the NBA's Brooklyn Nets, Chicago Bulls, Golden State Warriors, and Los Angeles Clippers.
It's not immediately clear when the supergroup will make its NYSE debut. However, last month in 2021 may be busy closing SPAC deals. Latin American iGaming and sports betting company Codere Online will debut at Nasdaq tomorrow, and Tilman Fertitta's Fertitta Entertainment will complete its merger with FAST Acquisition (NYSE: FST) this quarter.