Silver Lake’s next move: Divest OpenBet or ride the US sports betting wave?
In the wake of Silver Lake’s acquisition of Endeavor Group Holdings, which includes the sports betting platform OpenBet, industry insiders are contemplating the strategic alignment of OpenBet within Silver Lake’s portfolio. The question arises whether OpenBet’s business model aligns with Silver Lake’s investment strategy, and if not, could a divestiture be on the horizon?
Silver Lake, known for its technology-focused investments, now faces the task of integrating a sports betting platform into its portfolio. This has led to speculation about the future of OpenBet under Silver Lake’s ownership. The private equity firm’s history of strategic acquisitions and divestitures has prompted industry professionals to question whether OpenBet might be up for sale in the near future.
However, it’s also important to consider that Silver Lake’s acquisition of Endeavor, including OpenBet, could be part of a broader strategy to diversify its portfolio and expand into new markets. The sports betting industry has seen significant growth in recent years, and OpenBet’s strong market presence could make it a valuable asset for Silver Lake.
While the future of OpenBet under Silver Lake’s ownership is uncertain, the speculation reflects the dynamic nature of the private equity landscape and the strategic decisions that Silver Lake must consider.
Silver Lake’s relationship with Endeavor
Private equity firm Silver Lake announced that it is acquiring the entertainment company Endeavor Group Holdings for $27.50 per share. The acquisition, which appraises Endeavor at an equity value of $13 billion, will see Silver Lake acquire 100 percent of the shares it does not already own. The transaction is expected to close by the end of the first quarter of 2025.
Endeavor, led by CEO Ariel Emanuel, operates in talent representation, brand licensing, and live events. The company has undergone significant changes in recent years. In 2022, it acquired OpenBet, a sports betting platform, and in 2023, it sold IMG Academy, a sports education institution, in a $1.25 billion deal. Endeavor is also the majority owner of TKO Group Holdings, which owns the UFC and WWE. TKO will remain a publicly traded company as part of the deal.
Emanuel believes that the transaction will maximize value for all of Endeavor’s public stockholders and is excited to continue to unlock and invest in the growth opportunities ahead as a private company. The announcement of the acquisition saw Endeavor’s stock rise more than 2 percent yesterday afternoon after a brief halt, trading just under $26 per share.
Silver Lake’s relationship with Endeavor dates back to 2012 when it initially invested in the company and supported its acquisition of UFC in 2016. Silverlake’s co-CEO Egon Durban and managing director Stephen Evans were members of Endeavor’s board ahead of the acquisition, indicating a long-standing strategic partnership.
This acquisition marks a significant milestone in Endeavor’s history, reflecting its evolution and growth in the entertainment industry. As Endeavor transitions to private ownership, it continues to explore strategic alternatives, including a possible sale of some of its assets to further its position in the market.
What are OpenBet’s future prospects?
A leading provider of sportsbook technology content, award-winning OpenBet has been owned by Endeavor Group Holdings, Inc since 2021. The company has a significant market presence: in 2020, it was the market leader in Canada where 80 percent of all digital sports bets were processed through its platform. In the same year in the UK, it accounted for 65 percent, and in Australia, 46 percent. The OpenBet platform is licensed in 13 US states, and in 2020, 40 percent of all bets in the country were carried out on its platform. OpenBet’s platform is designed to allow users to bet and play in multiple languages and currencies across a range of products and platforms, including web, mobile, retail outlets, call centres, and interactive television, with a single sign-on to a centralized OpenBet account.
The company was originally founded as Orbis Technology in 1996, by Clive Haworth, James Caddy, and Charles Malir.?Its first sports betting application, Betonline, was released through a joint venture with City Index and Sporting Life in time for the 1998 World Cup. In 1999, Orbis launched its OpenBet Casino, and the Sky Vegas Live Roulette channel.?By 2000, Ladbrokes, Surrey Sports, and Paddy Power were live on OpenBet.?In December 2000, the company was acquired by NDS Group, a News Corporation company, and a technology provider in digital television.
In 2010, Orbis Technology was renamed to OpenBet, the name of its eponymous software betting platform. It also acquired Alphameric Solutions, a software company supplying betting retail products, which was renamed as the OpenBet Retail division. OpenBet was acquired by Endeavor in 2022, marking a significant milestone in its history. The company has since continued to evolve, acquiring OpenBet’s Greek branch from outsourcing partner Athens Technology Center S.A., increasing the group’s headcount by 25 percent.
While Silver Lake has not made any public statements about divesting OpenBet, it is worth noting that private equity firms often buy companies with the intention of making strategic changes to enhance their value. This could involve anything from operational improvements to a complete sale of the company.
Only time will tell what the future may hold for OpenBet.
