MGT Purchases DraftDay.com
The transaction won’t become official for about another week, but some big news has broken (on April Fools Day, nonetheless) in our industry over the last couple of hours. MGT Capital Investments, Inc. (NYSE MKT: MGT) announced that they’ve entered into an asset purchase agreement with CardRunners Gaming, Inc. to acquire the DraftDay fantasy sports business and software platform. MGT will reportedly pay $600,000 in cash and approximately 100,000 shares of common stock to acquire the DraftDay assets. Again, the transaction is expected to close in about a week.
This news has been taken a few different ways by the community (judging by the mixed feelings in the forums), but it’s still too early to really gauge what this means for not only DraftDay, but FanThrowdown as well. Despite not being one of the “big three” daily fantasy sports sites (DD is currently 4th in the industry, based on the most recent Alexa reports), DraftDay has been a favorite in the DFS community thanks to some slick software and a user interface that appeals to just about everyone. DD’s bracket-style tournaments have become a big hit with their users, and the recent addition of live drafts also gives players a bevy of options to choose from other then the typical salary-cap format most are accustomed to. Andrew Wiggins, co-founder of DraftDay stated, “We have worked tirelessly to build an outstanding product and loyal player base. With MGT’s support, DraftDay will have greater resources to grow this business to new heights. Our employees look forward to making MGT the market leader in daily fantasy sports.”
Robert Ladd, Chief Executive Officer of MGT, summarized today’s news, “This acquisition represents a unique financially compelling opportunity and tremendous complement to our online gaming businesses. DraftDay will elevate our fantasy sports segment to an entirely new level. We are very pleased to welcome the players and employees of DraftDay.”
Added Robert Traversa, MGT’s Chief Financial Officer, “Combined with the recently initiated joint venture with Vegas Insider, we expect that the acquisition of DraftDay will be accretive to our operating results, with MGT Sports projected to become cash flow positive by year-end.”
About MGT Capital Investments, Inc.
MGT and its subsidiaries are engaged in the business of acquiring, developing and monetizing assets in the online and mobile gaming space, as well as the casino industry.
Subsidiary MGT Studios is publisher of social games and real money games of skill, and will launch www.MGTplay.com and SlotChamp™ in early 2014.
MGT Gaming, a majority owned subsidiary, owns U.S. Patents Nos. 7,892,088 and 8,500,554 relating to certain casino slot machine systems and has filed a patent infringement lawsuit against WMS Gaming (a subsidiary of Scientific Games Corporation), and others. The Company also owns a majority interest in FanTD LLC, the operator of FanThrowdown.com, one of the leading online daily fantasy sports wagering websites. Another majority owned subsidiary, MGT Interactive, owns REAL DEAL POKER™, an innovative online poker technology with a patented card shuffling system, allowing for regulatory transparency and auditability, and a higher level of realism.