Sports-betting Data Provider Selects IPO In Latest Blow For Blank-check Deals
Source: PitchBook, Adam Lewis
Photo: Dallas Mavericks owner Mark Cuban, right, and Washington Wizards owner Ted Leonsis are among the investors in Sportradar, which filed for a traditional IPO this week after reportedly reaching a major SPAC deal this spring. (Patrick Smith/Getty Images)
Sportradar has filed for an IPO just months after reportedly reaching a $10 billion deal to go public via a blank-check company, in the latest blow to the SPAC strategy after a frenzied start to the year.
The Switzerland-based sports-betting data provider had agreed to go public through Horizon Acquisition Corp. II, a blank-check company backed by Los Angeles Dodgers co-owner Todd Boehly, according to Sportico. But the two sides failed to come to terms, and the deal fell apart in June.
Now, Sportradar will list on the Nasdaq via a traditional public offering, with a high-profile group of investors including Michael Jordan and Mark Cuban looking to cash in as more US states legalize sports gambling.
Investors have recently shied away from blank-check IPOs after the strategy surged in 2020 and early 2021. In the second quarter, the number of blank-check IPOs dropped more than 66% quarter-over-quarter, falling from 315 to 106, according to PitchBook data.
The decline comes as SPACs face increasing scrutiny from SEC chair Gary Gensler. In May, Gensler questioned whether the structure of blank-check companies aligns shareholders with management who can exercise warrants to buy shares at a lower price in the future. On Tuesday, former SEC commissioner Robert Jackson and Yale law professor John Morley reportedly filed suit against hedge fund giant Bill Ackman, alleging Ackman’s Pershing Square Tontine Holdings is an investment company rather than an operating company.
In 2021, SPACs have largely struggled on the public markets. Of the 107 companies to go public via SPAC in 2021, only 26 were trading above their standard IPO price of $10 per share as of Tuesday’s close, according to SPAC Track, an online tool that tracks SPAC performance.
Meanwhile, Sportradar’s revenue has jumped as the legalized sports gambling market continues to surge in the US. In addition to Jordan and Cuban, the company’s investors include Washington Wizards owner Ted Leonsis, TCV and the Canada Pension Plan Investment Board. The business was valued at $2.4 billion in 2018.