Blank check company dMY Technology Group is acquiring online casino and sports wagering company Rush Street Interactive LP and taking it public.
The transaction values the combined company at an enterprise value of $1.78 billion, or 5.6 times Rush Street’s projected 2021 revenue of $320 million.
Las Vegas-based dMY Technology, which was created as a publicly traded company to make an acquisition, said once the deal closes it will change its name to Rush Street Interactive and change its trading symbol on the New York Stock Exchange to “RSI.”
Chicago-based Rush Street Interactive was founded in 2012 by gaming industry veterans Neil Bluhm, Greg Carlin and Richard Schwartz and has since become a leading player in online casino and sports betting in the U.S.
The company launched its first online gaming casino site, PlaySugarHouse.com, in New Jersey, in September 2016 and is the first online gaming company to launch online sports wagering in Pennsylvania, Indiana, Colorado and, most recently, Illinois. It also was the first U.S.-based gaming operator to launch a legal and regulated online sportsbook on a national basis in Latin America, with Rushbetco in Colombia.
Under terms of the deal, DMY will pay RSI shareholders a combination of cash and rollover equity. Cash proceeds will consist of dMY’s $230 million of cash in trust and an additional $160 million from institutional investors led by Fidelity Management and Research Co.
Once the deal closes, expected this year, Rush Street will continue to be run by Chairman Neil Bluhm, Chief Executive Greg Carlin and President Richard Schwartz, while dMY’s leaders Niccolo de Masi and Harry You will join the board. Bluhm and his affiliates will hold both a controlling economic and a voting interest in the combined company.
Rush Street is expected to have more than $230 million in net cash, which it plans to use to expand further into the online casino and sports betting markets.
Rush Street competitor DraftKings also recently went public via a merger with Los Angeles blank check company Diamond Eagle Acquisition Corp. That deal put Boston-based DraftKings at a value of $3.3 billion.
