In a deal valued at about $1.56 billion, DraftKings announced on Monday that it has entered into a definitive agreement to acquire all issued and outstanding shares of Houston-based Golden Nugget Online Gaming Inc. (GNOG) as it looks to further expand its i-gaming reach.
As part of the transaction, DraftKings also entered into a commercial agreement with Fertitta Entertainment Inc., which is led by Houston billionaire Tilman Fertitta and is the parent company of the Houston Rockets, Golden Nugget and Landry’s, among other assets.
DraftKings selected Raine Group as exclusive financial advisor and Sullivan & Cromwell as legal counsel.
R. Stanton Dodge, Boston-based DraftKings’ chief legal officer and secretary, led the company’s internal legal team.
Latham & Watkins advised Fertitta and Fertitta Entertainment in the transaction with a corporate deal team led by New York partners Ian Schuman and Marc Jaffe and Houston partners Nick Dhesi and Ryan Maierson, along with Houston associates Thomas Verity, Bryan Ryan, Ben Marek and Austin Sheehy. Additional Texas assistance came from Houston associate Jared Grimley, who provided counsel on tax matters.
Jefferies acted as lead financial advisor to Golden Nugget Online Gaming.
White & Case represented Golden Nugget’s special committee of the board in legal matters, while Spectrum Gaming Capital was financial advisor.
Houston associate Nate Bascom was on the White & Case team.
Vinson & Elkins advised Spectrum on legal matters with a team led by New York partner John Kupiec with assistance from Houston associate Mariam Boxwala. Partner Wally Schwartz of New York also provided counsel on real estate matters.
Under the all-stock agreement, GNOG stockholders will receive 0.365 shares of Class A common stock for each common share. Fertitta, who owns a 46% equity stake in GNOG, agreed to hold DraftKings shares issued to him for at least a year, should the transaction close.
The deal is expected to close in the first quarter of 2022, pending approval from GNOG stockholders, regulatory approvals and customary closing conditions.
Golden Nugget hit public markets in December 2020 after the completion of a merger with special purpose acquisition company Lancadia Holdings II. Fertitta served as leader of both companies prior to the de-SPAC merger and continued on as chairman and chief executive of the combined entity.
Fertitta’s had a busy year beyond the latest goings-on with GNOG.
In one of the largest transactions in Texas in the first half of 2021, blank-check company Fast Acquisition Corp. agreed to merge with a portion of Fertitta Entertainment Inc. – the holding company for virtually all of Fertitta’s assets – at an enterprise value of $8.6 billion. The deal included the majority of the assets tied to the Golden Nugget casino and resort business; Landry’s; and Fertitta Entertainment’s approximately 31.35 million shares in the GNOG online gaming business.
In June, Fast Acquisition announced the addition of 42 more business assets to the de-SPAC merger, including Fertitta’s Mastro’s brand, the Aquariums, the Pleasure Pier, Vic and Anthony’s, and a handful of smaller restaurant concepts. The expanded agreement also added the Catch restaurants, including Catch Steak, a restaurant group 50% owned indirectly by Fertitta.