FansUnite (FANS.TO) is a sports and entertainment company, focusing on technology related to regulated and lawful online sports betting, esports betting, casino and fantasy. Their mission is to be a leader in the gaming industry by providing their partners and players the industry’s most versatile and vertically integrated platforms with a portfolio of unique products and a focus on esports, sports betting, casino and the next generation of bettors.
Today, the Company announced it has entered into a definitive agreement with GeoComply Solutions Inc. and Hero Group Corp., pursuant to which the Company has agreed to sell to the Purchaser all of the issued and outstanding shares of FansUS (a wholly-owned subsidiary of the Company that carries its Betting Hero business), for an aggregate purchase price of US$37.5 million, adjusted on a cash-free, debt-free basis.
FansUnite anticipates net proceeds from the sale of FansUS of approximately US$20 million assuming a closing date on or about August 15th 2024. Upon completion of the Transaction, the Purchaser will be controlled 60% indirectly by Betting Hero’s co-founders, Jai Maw and Jeremy Jakary (the “Betting Hero Co-Founders“), and 40% by GeoComply.
Pursuant to the terms of the Stock Purchase Agreement, the Company has agreed to distribute 90% of the Net Proceeds to the holders of common shares of the Company, subject to applicable solvency and other legal or contractual requirements, as a return of capital on the Company Shares. It is anticipated that the Distribution to be paid to the Shareholders subsequent to the completion of the Transaction is likely, based on the USD/CAD exchange rate published by the Bank of Canada on June 26, 2024, to be in the range of approximately C$0.065 to C$0.075 per Company Share.
Scott Burton, Chief Executive Officer and a director of the Board, stated: “After a long and thorough strategic evaluation of our business, we’ve received a substantial cash offer for our primary remaining asset. It not only reflects high market multiples when compared to similar transactions but also a substantial premium to our current share price. After extensive deliberation with our Board and advisors, we believe it’s in the best interest to recommend the sale and allow the Shareholders to vote on a return of capital.”
In making its determination to unanimously recommend approval of the Transaction to the Board, and in the Board’s determination to approve the Transaction, the Special Committee and the Board considered the following factors, among other things:
Attractive Premium and Immediate Liquidity
Formal Valuation and Fairness Opinion
Support for the Transaction
Stock Purchase Agreement and “Fiduciary Out
Future Opportunity to Retain Exposure
Procedural Protections
Details can be found in today’s press release.
Pursuant to the Stock Purchase Agreement, as consideration for all of the issued and outstanding shares of FansUS, the Purchaser has agreed to pay to FansUnite an aggregate purchase price of US$37.5 million as follows:
- US$30.6 million, to be paid in cash on the closing of the Transaction after adjustment on a cash-free and debt-free basis; and
- US$6.9 million, to be satisfied through the cancellation of the Demand Note
The stock has been in a range since last year September. Today’s news is seeing the stock rocket up to the upper portion of this range. The resistance level of $0.065. A close above this level would trigger a technical breakout and a move to the $0.11 zone.
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