Draftkings Inc. · NASDAQ:DKNG
Draftkings — Merger or Acquisition (August 2021)
14 slides from Draftkings's merger presentation, Aug 9, 2021
Slide 1: DraftKings Acquisition of Golden Nugget Online Gaming
| INVESTOR PRESENTATION AUGUST 9, 2021 ▪ DRAFTKINGS ( “ DKNG ” ) ACQUISITION OF GOLDEN NUGGET ONLINE GAMING ( “ GNOG ” ) THROUGH AN ALL - STOCK MERGER ▪ COMMERCIAL AGREEMENT WITH GOLDEN NUGGET RETAIL CASINOS, FERTITTA ENTERTAINMENT ( “ FEI ” ) PROPERTIES AND HOUSTON ROCKETS
Slide 2: Legal Disclaimer
| LEGAL DISCLAIMER Forward - Looking Statements and Non - GAAP Financial Measures This presentation, and the accompanying oral presentation, contain forward - looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigatio
Slide 3: Transaction Rationale
| | Resulting synergies of $300M+ in EBITDA expected at maturity from revenue uplift, COGS improvement, marketing efficiency, and corporate overhead scale In addition to the acquisition, entering into a strategic commercial agreement with Golden Nugget Retail Casinos, Landry’s, and the Houston Rocke
Slide 4: Deal Brings a New iGaming Brand, Live Dealer Capabilities, and Additional Benefits
| | DEAL BRINGS A NEW i GAMING BRAND, LIVE DEALER CAPABILITIES, AND A SUITE OF ADDITIONAL BENEFITS 3 Increase iGaming Market Share Bring Live Dealer In - House ▪ Leverage Golden Nugget brand in dual brand strategy targeting both Sportsbook and iGaming ▪ Access to Golden Nugget existing online gaming
Slide 5: Benefits of Having Multiple Brands
| | BENEFITS OF HAVING MULTIPLE BRANDS Combination of online presence and physical properties creates expanded opportunities for customer acquisition Addition of Golden Nugget user base will enhance DraftKings’ reach across diverse customer demographics Combined company has more efficient marketing
Slide 6: Renowned Name in Gaming
| | RENOWNED NAME IN GAMING RENOWNED NAME IN GAMING 5 (1) Per Houston Business Journal. (2) Per The New York Times. EXCITING COMMERCIAL AGREEMENT WITH A COLOSSAL HOSPITALITY EMPIRE Billion Dollar Buyer was CNBC’s “most watched premiere hour ever” (1) New York Times Best - Selling Author “Fertitta sh
Slide 7: Meaningful Synergies Across Revenue and Cost Categories
| | MEANINGFUL SYNERGIES ACROSS REVENUE AND COST CATEGORIES 6 EXPECTED SYNERGIES OF $300+ MILLION AT MATURITY Revenue Synergies ▪ Uplift from cross - promotion, with additional synergies from tech (e.g., innovation, time to market), game expansion (e.g., live dealer) and enhanced loyalty programs ▪
Slide 8: Transaction Overview
| | GNOG shareholders to receive 0.365 DraftKings Class A Common shares for each existing GNOG share − Offer price of $18.83 per share based on DraftKings’ closing price of $51.59 on August 6 − Implied equity market valuation of approximately $1.56 billion Offer value implies a 7.6x 2022E (1) revenu
Slide 9: Transaction Benefits for Fertitta Entertainment
| | Long - term partnership with DraftKings diversifies FEI’s core gaming and hospitality demographic Ability for FEI to leverage DraftKings’ customer database to increase traffic flow and profitability into FEI properties Opportunity for FEI to create a differentiated sports - oriented DraftKings r
Slide 10: Appendix
| APPENDIX
Slide 11: Value from Incremental North America iGaming Market Share
| $696 $1,392 $2,088 $2,784 $3,480 Additional 5% Additional 10% Additional 15% Additional 20% Additional 25% VALUE FROM INCREMENTAL NORTH AMERICA i GAMING MARKET SHARE SCENARIOS, NON - GAAP GROSS REVENUE EACH 5% OF INCREMENTAL i GAMING MARKET SHARE IS WORTH $675MM+ IN GROSS REVENUE AT MATURITY 10 In
Slide 12: Pro Forma Enterprise Value Build
| PRO FORMA ENTERPRISE VALUE BUILD 11 (in millions, except for share prices) GNOG STANDALONE DKNG STANDALONE ISSUED SHARES PRO FORMA TEV Diluted Shares Outstanding (1) 82.861 430.444 30.244 460.688 (x) Share Price (2) $18.83 $51.59 $51.59 Equity Value $1,560 $22,207 $23,767 ( - ) Cash (3) (154) (2,6
Slide 13: Pro Forma Share Count Build
| PRO FORMA SHARE COUNT BUILD 12 Note: Table does not include DraftKings Class B shares, which have no economic or participating rights. (1) Based on Treasury Stock Method (“TSM”); assumes DKNG share price of $51.59 as of 8/6/2021. (2) Based on TSM; assumes DKNG’s share price of $51.59 as of 8/6/202
Slide 14: Integrated Platform Creates Competitive Advantages
| | 13 Source: GN, LLC management. (1) Entering market through a Joint Venture. LAND - BASED GAMING UPSCALE RESTAURANTS CASUAL RESTAURANTS AND OTHER INTEGRATED PLATFORM CREATES COMPETITIVE ADVANTAGES Las Vegas Laughlin Lake Charles Atlantic City Biloxi Illinois (2022) (1)