Codere and DD3 Acquisition Corp., a publicly traded special purpose acquisition firm, have reached an agreement to merge their online gambling subsidiaries.
Codere Online will become a public corporation and trade on the US Nasdaq stock exchange as a result of the $350 million deal, which was authorised by the business’s board of directors.
The online sports betting and gambling operator’s current management will continue to run the company, while Codere Group will retain controlling ownership following the merger.
Taking Codere Online to a new level
Vicente Di Loreto, CEO of Codere Group said: “We are proud of this deal, which will provide our online team with the financial resources needed to grow Codere Online and take it to a new, higher level.
“It is a good signal of the value we have been able to create in the last three years boosting this business unit.”
Moving forward, the business plans to use its position in Spain, Italy, Mexico, Colombia, and Panama, as well as Buenos Aires, where it plans to begin operations in late 2021, to fuel growth in Latin American markets.
Codere Online claims it is focusing on locations where online gambling may soon be regulated, such as Brazil, Chile, Peru, Uruguay, and other parts of Argentina, as well as exploring its options for tapping into the Hispanic online gambling market in the United States.
Codere Online’s managing director, Moshe Edree, said: “We are thrilled to partner with DD3. This deal brings together the renowned Codere brand and our deep expertise in growing online gaming businesses, with a world-class sponsor like DD3 that has a proven track record of building businesses through a team of seasoned investors.”
The combined company has an estimated enterprise value of $350 million, or 2.3 times Codere Online’s expected sales of $150 million in 2022.
DD3 Capital Partners, Baron Funds, MG Capital, and LarrainVial have committed to a private investment of more than $67 million, which will close concurrently with the business combination, with Baron Funds also committing to roll-over approximately $10 million of shares in the SPAC, resulting in a minimum transaction proceeds of $77 million.
DD3 has $125 million in cash in its trust account, which will be used to fund marketing, technological and platform advancements, and expansion into new high-growth areas, in addition to the private investment.
The planned business combination has been accepted by the respective management bodies of Codere Online and DD3, with completion expected in the fourth quarter of 2021.
DD3 Capital Partners’ founding partner, Martin Werner said: “We are excited to partner with Moshe and his team to bring Codere Online to the public markets.
“The omnichannel presence of Codere, paired with the expansive addressable market and limited competition from global gaming operators, gives Codere Online a unique advantage in their expansion across Latin America.”
It’s also worth noting that the sale has no bearing on the company’s reorganisation plan, which was revealed in April as a result of the group’s significant cash challenges as a result of the pandemic.