Platinum Eagle eyes FanDuel acquisition after failed DraftKings merger

Fantasy Sports

Leading fantasy sports company FanDuel Inc is in talks to hit the public markets, yet probably not in the traditional sense with an initial public offering.

Instead, the New York-based company is likely to to participate in a reverse merger with Platinum Eagle Acquisition Corp.

Platinum Eagle is a special purpose acquisition company, which are essentially management teams that raise money from the public markets with the intent of taking over one or a handful of companies. The company raised $300 million earlier this year and now trades on the Nasdaq exchange.

Terms of the potential deal have not been disclosed, yet in 2016, FanDuel claimed its fully-diluted value stood at $1.2 billion. The valuation was calculated for the purpose of discussions ended in July regarding a potential merger with its biggest competitor, DraftKings, which was barred by antitrust regulators.

The nine-year-old company, which targets the over 30 million adult fantasy sports players in North America, has raised a total of over $416 million in seven rounds of funding, according to Crunchbase. Backers include KKR & Co., NBC Sports, Comcast Corp.’s venture arm and the National Basketball Association. One source suggests thinking about the potential takeover by Platinum Eagle as more of a fundraise for the New York-based company than as an exit for FanDuel investors, according to Axios.

In November, it was announced that FanDuel Chief Executive Officer Nigel Eccles would step down from his leadership position at the sports betting company and be replaced by Chief Financial Officer Matt King. Many viewed the move as a signal of a forthcoming sale.