Super Group, Sports Entertainment Acquisition Approve Merger

Posted on: January 26, 2022, 09:28h. 

Last updated on: January 26, 2022, 12:01h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Blank-check firm Sports Entertainment Acquisition Corp. (NYSE:SEAH) said today its investors approved a merger with Super Group. That paves the way for the Betway parent to become a freestanding publicly traded company.

Super Group
The Betway brand advertised on West Ham Football Club’s jersey. Parent company Super Group is going public in the US this week. (Image: Getty Images)

The special purpose acquisition company (SPAC) is combining with SGHC Ltd. Closing of that transaction is scheduled to occur tomorrow. Following closing, the newly public entity will be known as Super Group Ltd. and its shares will trade on the New York Stock Exchange under the ticker “SGHC.”

Super Group has waived the minimum cash condition to be satisfied at the closing of the Business Combination, and SEAH expects all closing conditions to be met,” according to a statement. “The transaction is expected to generate approximately $202.4 million from SEAH trust proceeds, reflecting approximately 45 percent of the publicly held shares that were not submitted for redemption.”

Shares of Sports Entertainment Acquisition are trading higher today on news of the shareholder vote, slightly stemming a 19 percent drop over the past week.

SEAH, Super Group Finally Reach Altar

While the Betway brand isn’t yet widely known to US bettors, the Super Group merger is one of the more widely anticipated transactions in the sports betting equity space. It took longer than expected to get here.

Super Group and Sports Entertainment Acquisition announced merger plans last April. It was expected that the transaction, which initially carried a pre-equity valuation of $4.75 billion, would close in the fourth quarter of 2021.

It remains to be seen if investors are as enthusiastic about Super Group coming public this week as they were in April 2021, when the blank-check merger was originally announced. In recent months, appetite for deSPACed companies — regardless of industry — is waning, and the stocks are tumbling. Amid concerns of profitability and total addressable market, some of 2021’s worst-performing gaming equities — and the trend is carrying over into this year — are sports betting companies that came to market via blank-check mergers.

Additionally, some of the most notable pulled SPAC transactions in recent months hail from the gaming industry. They include Tilman Fertitta’s Fertitta Entertainment (FEI) and FAST Acquisition (NYSE:FST), ending an $8.6 billion combination, and Wynn Resorts (NASDAQ:WYNN) pulling the plug on a $3.2 billion deal to bring its Wynn Interactive unit public.

Super Group Outlook

Even with the aforementioned post-SPAC struggles of other gaming companies, Super Group could buck the trend. The Betway brand is well-known in markets outside the US, and its Spin unit is a popular online casino provider.

“The group is licensed in 25 jurisdictions, with leading positions in key markets throughout Europe, the Americas and Africa. The group’s successful sports betting and online gaming offerings are underpinned by its scale and leading technology, enabling fast and effective entry into new markets,” according to the statement.

Through the previously announced acquisition of Digital Gaming Corp. (DGC), Super Group gained market access in up to 10 states, including Colorado, Indiana, Iowa, New Jersey, and Pennsylvania.