Sports Entertainment Acquisition Corp. (NYSE:SEAH), the special intent acquisition companion (SPAC) merging with Betway parent Super Group, is earning kudos from a sell-side. That indicates there’s some enthusiasm for what’s likely to follow i of the quaternary quarter’s largest blank-check deals.

In a remark to clients today, Benchmark psychoanalyst Mike Hickey starts insurance coverage of Sports Entertainment Acquisition with a “buy” rating and a $16 damage target, implying upside of 45.45 percent from the Nov. 29 close. That reportage will transfer to Super Group when it becomes a standalone public entity. The blank-check dealing is slated to secretive in the current canton and the gaming operator testament swop on the New House of York Stock Exchange below the stock ticker “SGHC.”

The psychoanalyst forecasts ongoing growing for the global online gaming market, noting Super Group’s “highly profitable” internet weapons platform and pragmatic plan of attack to gaining divvy up in new markets render it “a winning formula for ongoing success.”

When the blank-check dealings was announced in April, the Betway parent said the business deal had a pre-equity valuation of $4.75 billion. That indicates Super Group’s merger with Sports Entertainment represents unity of the largest combinations to escort betwixt a SPAC and a gaming company.

Reasons to Believe Hickey Is Right

With shares of so many deSPACed companies faltering, including several in the gaming industry, analysts and investors are increasing scrutiny on equipoise sheets and financial sturdiness.

While Super Group is coming to market place at a time of waning enthusiasm for gaming SPAC deals, there are reasons to believe Hickey’s bullish assessment is warranted. As noted above, the troupe is profitable — a rareness among online sportsbook operators.

Super Group calculate $1.5 one million million of meshing gaming revenue (NGR) this year, with earnings before interest, taxes, depreciation and amortisation (EBITDA) of $350 million. Those figures are expected to swell to $1.7 one thousand million and $420 million, respectively, next year.

Following closedown of the business deal with Sports Entertainment, Super Group testament have got $200 1000000 in immediate payment on its equilibrium sheet and no debt.

Inside Super Group Thesis

For investors, a potency source of temptingness with Super Group is that the companionship isn’t aiming to scale leaf Betway to FanDuel or DraftKings levels inwards the US. That implies it doesn’t require to mesh in a cash-sapping disbursement warfare simply to pull in market share.

Still, the operator has US ontogeny plans. When the blank-check dealings was announced, Super Group also said it’s acquiring Digital Gaming Corp. (DGC). The purchase of DGC brings added market access of upward to 10 states, including Colorado, Indiana, Iowa, New Jersey, and Pennsylvania, and that could live applicable to both iGaming and sports wagering, according to the company.

Malta-based Betway has to a greater extent than 60 trademark agreements with athletes, leagues, and teams around the world. In the US, such accords include the NBA’s Brooklyn Nets, Windy City Bulls, Golden State Warriors, and the Los Angeles Clippers.

It’s non directly crystalise when Super Group testament puddle its NYSE debut. But the in conclusion month of 2021 could be busy for gaming SPAC deals closing. Codere Online, a Latin American iGaming and sports wagering firm, debuts on the Nasdaq tomorrow, and Tilman Fertitta’s Fertitta Entertainment is expected to make out a merger with FAST Acquisition (NYSE:FST) inwards the current quarter.