The Stars Group’s Acquisition of Sky Betting & Gaming and $6.8 Billion Financing

Morgan Stanley & Co. LLC and PJT Partners LP acted as financial advisors to The Stars Group and its Board of Directors, and Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Macquarie Capital (USA) Inc. and Morgan Stanley & Co. LLC provided the committed debt financing. PJT Partners LP also advised The Stars Group on the debt financing associated with the transaction. Gibson, Dunn & Crutcher LLP and Blake, Cassels & Graydon LLP acted as co-counsel to The Stars Group in connection with the transaction. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to The Stars Group on the debt financing associated with the transaction.

The Stars Group Inc. (Nasdaq: TSG) (TSX: TSGI) has completed its previously announced acquisition of Sky Betting & Gaming (“SBG”).

This acquisition also provides The Stars Group with multiple expected operational and financial benefits, including: Dramatically improves The Stars Group’s revenue diversity, creating a balanced spread across poker, casino and sportsbook with a broad geographic reach.

Increases The Stars Group’s presence in locally regulated or taxed markets to approximately 75% of combined revenues.

Develops sports betting as a second customer acquisition channel, complementing The Stars Group’s core offerings and creating an opportunity to cross-sell players across multiple verticals.

Enhances The Stars Group’s products and technology through the addition of SBG’s innovative sportsbook and casino offerings and portfolio of popular mobile apps.

Consideration for the purchase of SBG was comprised of a combination of cash and approximately 37.9 million newly-issued common shares of The Stars Group. The cash consideration of the acquisition was financed through cash on the balance sheet, proceeds from The Stars Group’s recent equity offering and newly issued debt consisting of: $100 million from its revolving credit facility, which was increased to $700 million, priced at LIBOR plus 3.25% and maturing in five years; $4,567 million equivalent in new first lien term loans, comprising a U.S. dollar denominated tranche of $3,575 million priced at LIBOR plus 3.50% and a Euro denominated tranche of €850 million priced at Euribor plus 3.75%, and each with a 0% floor and maturing in seven years; and $1,000 million in 7.0% unsecured senior notes due July 2026.

The Paul, Weiss team included corporate partners Chris Cummings (Picture), Gregory Ezring, Manuel Frey, Adam Givertz and Brian Kim, counsel David Carmona, Philip Heimowitz, Christian Kurtz and Austin Witt; litigation partner Mark Mendelsohn; intellectual property partner Claudine Meredith-Goujon; tax partner Patrick Karsnitz and counsel Alyssa Wolpin; employee benefits counsels Jason Ertel and Uri Horowitz; and environmental counsel Bill O’Brien.

 

Involved fees earner: Christopher Cummings – Paul Weiss Rifkind Wharton & Garrison; Gregory Ezring – Paul Weiss Rifkind Wharton & Garrison; Manuel Frey – Paul Weiss Rifkind Wharton & Garrison; Adam Givertz – Paul Weiss Rifkind Wharton & Garrison; Brian Kim – Paul Weiss Rifkind Wharton & Garrison; David Carmona – Paul Weiss Rifkind Wharton & Garrison; Philip Heimowitz – Paul Weiss Rifkind Wharton & Garrison; Christian Kurtz – Paul Weiss Rifkind Wharton & Garrison; Austin Witt – Paul Weiss Rifkind Wharton & Garrison; Mark Mendelsohn – Paul Weiss Rifkind Wharton & Garrison; Claudine Meredith-Goujon – Paul Weiss Rifkind Wharton & Garrison; Patrick Karsnitz – Paul Weiss Rifkind Wharton & Garrison; Alyssa Wolpin – Paul Weiss Rifkind Wharton & Garrison; Jason Ertel – Paul Weiss Rifkind Wharton & Garrison; Uri Horowitz – Paul Weiss Rifkind Wharton & Garrison; William O’Brien – Paul Weiss Rifkind Wharton & Garrison;

Law Firms: Paul Weiss Rifkind Wharton & Garrison;

Clients: The Stars Group;

 

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Author: Ambrogio Visconti