Form S-4, or Registration Statement, is a filing with the SEC by a publicly traded company that is used to register any material information related to a pending merger or acquisition. The SEC Form S-4 usually contains information about the terms of the deal, risk factors, earnings ratios, and pro-forma financial information, among others.
Diamond Eagle filed the Registration Statement through its subsidiary DEAC NV Merger Corp. The special purpose acquisition vehicle said that its filing contained preliminary proxy statement/prospectus in relation with its combination with DraftKings and SBTech.
After months of speculation, DraftKings and SBTech announced their merger late last month. It also emerged that DraftKings would go public through its combination with Diamond Eagle, which currently trades on NASDAQ.
DraftKings and SBTech’s tie-up will create a $3.3 billion company that will be the only “vertically-integrated sports betting and online gaming company based in the United States.” The combined entity is anticipated to have more than $500 million of unrestricted cash on its balance sheet. In addition, the combination will provide DraftKings with in-house sports betting and online gambling technology, while spearheading SBTech’s expansion across the US.
Transaction to Close by Mid-2020
Diamond Eagle is practically acquiring DraftKings and SBTech, making the DFS and sports betting operator a public company. DraftKings’ Chief Business Officer, Ezra Kucharz, said in November that the company was “looking at a bunch of different options” to go public and that it was at the time in talks to be acquired by a special purpose acquisition company.
The transaction is expected to close in the first half of the year. Once that happens, Diamond Eagle will become DraftKings Inc. and will begin trading under a different ticker symbol. It will also reincorporate in Nevada by merging with its subsidiary DEAC NV Merger Corp.
The deal is subject to approval by Diamond Eagle shareholder, the recently filed Registration Statement (Form S-4) being declared effective by the SEC, and other customary closing conditions.
Diamond Eagle said that a number of institutional investors have committed to a private investment of $304 million in Class A common stock of the combined business that will close simultaneously with the closure of the combination. Subject to any redemptions by DEAC stockholders, there is also $400 million currently held in a trust account by Diamond Eagle.