Paddy Power Betfair announces acquisition of DRAFT

(PRESS RELEASE) -- Paddy Power Betfair today announces entry into the daily fantasy sports market in the U.S. with the acquisition of an early-stage operator, DRAFT.

DRAFT is mobile-led, featuring a differentiated product and a strong management team. The business will continue to be run by co-CEOs Jeremy Levine and Jordan Fliegel and will now have access to the group's marketing and technology capabilities.

This acquisition provides Paddy Power Betfair with exposure to a fast-growing market (90% CAGR between 2014 and 2016, over $300 million in revenues) and complements other businesses inside the U.S.

The initial cash consideration paid on completion was $19 million. Further cash consideration of up to $29 million will become payable over the next four years, depending on business performance. To maximize the growth opportunity, substantial marketing investment in the business is envisaged for the next years, with an EBITDA loss of approximately $20 million forecast in 2017.

Breon Corcoran, Chief Executive, said, "We are excited to be bringing DRAFT into the group and to further increase our presence in the U.S. DRAFT has a differentiated product, and we believe the business, with the support of our marketing and technology expertise, can take share in the fast-growing daily fantasy sports market."