UFC owner buying Las Vegas company’s sports-betting business

Las Vegas-based gaming manufacturer Scientific Games Corp. is selling its sports betting business for $1.2 billion to the owner of the Ultimate Fighting Championship, the company announced Monday.

Scientific Games will sell its OpenBet business to sports and entertainment conglomerate Endeavor Group Holdings in exchange for $1 billion in cash and $200 million in stocks.

OpenBet touts itself as a leading business-to-business sports betting company that specializes in processing bets, risk management and player accounts. The company has more than 75 global customers and 24 sportsbooks across 12 states.

The sale is the end result of a “thorough process” to sell OpenBet and allow Scientific Games to invest in content and digital markets, Barry Cottle, president and CEO, said in a written statement. The deal is expected to close next spring and requires regulatory approval.

“Endeavor’s deep industry relationships and global reach make them the ideal partner,” said Jordan Levin, Scientific Games’ digital business chief executive. In a separate release, Levin added, “Together, we are uniquely positioned to define the future of sports betting entertainment.”

Endeavor has headquarters in Beverly Hills and owns UFC as well as sports, talent, event and media giant International Management Group and talent agency William Morris Endeavor. Endeavor CEO Ariel Emanuel said OpenBet will complement the company’s existing IMG ARENA business, which provides livestreaming and data feeds to sportsbook brands.

“The combination … will enable us to expand our footprint across the entire sports betting value chain and further capitalize on the tremendous upside we see coming from this fast-growing global industry,” Emanuel said in a statement.

Endeavor acquired UFC in 2016 when the entertainment company was known as WME-IMG. The conglomerate and a group of investors bought the mixed martial arts company from Station Casinos executives Frank Fertitta III and Lorenzo Fertitta for about $4 billion. WME-IMG rebranded as Endeavor in 2017.

New York City-based The Raine Group and Latham &Watkins LLP advised Endeavor in the deal. U.K.-based Oakvale Capital LLP, Macquarie Capital Inc. USA and Cravath, Swaine &Moore LLP advised Scientific Games.

Shares of Endeavor, traded as $EDR on the New York Stock Exchange, opened Monday at $27.01 and reached $30.30 in after-hours trading Monday evening. Shares of Scientific Games, traded as $SGMS on the Nasdaq, opened at $80.72 and the stock price rose to $87.47 in after-hours trading.

Contact Mike Shoro at mshoro@reviewjournal.com. Follow @mike_shoro on Twitter.