In an amended Form F-1 filing with the Securities and Exchange Commission (SEC), Sportradar updated its initial public offering (IPO) plans. It now indicates it plans to raise $504 million by selling 19 million shares at a range of $25 to $28, potentially valuing the company at up to $8.3 billion.
The amount that could be raised and the number of shares to be sold could be fluid, because the sports betting data provider is planning to raise $159 million in a private placement to some early investors, and because underwriters have the option to purchase another 2.85 million shares.
The shares floated in the IPO and private placement represent just 2.3 percent of the basic shares outstanding. At the midpoint of the proposed range, Sportradar Group would command a market value of $29.4 billion,” said Renaissance Capital, an IPO research firm.
The Switzerland-based company plans to list on the Nasdaq Global Select Market using the symbol “SRAD.” J.P. Morgan, Morgan Stanley, Citigroup, and UBS Investment Bank are acting as lead book-running managers for the offering, while BofA Securities, Deutsche Bank Securities, Jefferies, and Canaccord Genuity will serve as additional joint book-running managers. The offering is slated to price next week.
Stunning Market Cap Forecast for Sportradar
The potential Sportradar market capitalization mentioned by Renaissance Capital is well above prior estimates.
Rumors regarding a Sportradar IPO surfaced over a year ago, with speculation swirling that the company could seek a valuation of $10 billion to $12 billion. In fact, some market observers believe it was those numbers that led the betting data provider and special purpose acquisition company (SPAC) Horizon Acquisition Corp. II (NYSE: HZON) to end talks for a transaction that would have paved the way for Sportradar to go public.
Assuming the figures floated by Renaissance are anywhere close to being accurate, Sportradar’s market value could be more than seven times in excess of that of Genius Sports (NYSE:GENI) — the Swiss company’s nearest rival. London-based Genius currently sports a market cap of $4.04 billion. Still, the $8.3 billion is more than double Genius’s market value.
Given various total addressable market (TAM) and compound annual growth rate (CAGR) forecasts, the Sportradar valuation mentioned by Renaissance may not be too far-fetched.
“We are well-positioned at the intersection of the global sports betting and gaming industry and the global sports market. Global gaming represents a TAM opportunity of roughly $209 billion in 2021, growing to $272 billion in 2025 at a seven percent CAGR, according to the H2 report,” said Sportradar in the F-1 filing. “The global sports market is estimated at $172 billion in 2021 and growing at four percent CAGR through 2025 to $203 billion, according to the BCG Reports. Within this market, media rights and gate revenues represent $102 billion in 2021 growing to $121 billion in 2025 at a 4 percent CAGR.”
Sportradar IPO Enthusiasm Could Be Strong
Founded in 2001, Sportradar notched revenue of $576 million for the 12 months ending June 30, 2021.
The IPO could be well-timed, because football season is here, and leagues are seeing value in data partnerships and investors are renewing their affinity for sports wagering equities.
“In the US market, the company is the #1 provider of data to bookmakers, supplying sports data to over 85 percent of all bookmakers in the US,” adds Renaissance. “For its 150+ sports league partners, Sportradar provides access to over 900 sports betting operators and over 350 media companies to distribute their data and content globally.”