Shares of sports data and technology provider Sportradar (SRAD 1.94%) were up 10% this week as of 2:15 p.m. ET on Thursday, according to data provided by S&P Global Market Intelligence.
Sportradar reported fourth-quarter earnings on Wednesday, wherein revenue and cash from operations grew by 26% and 36% in 2024.
However, management also announced a unique acquisition that seemed to steal the show, and the market reacted optimistically.
NASDAQ: SRAD
Key Data Points
Sportradar receives $225 million to make an acquisition
Sportradar is a pick-and-shovel provider of sorts to the massive sports betting industry. Primarily, the company serves sportsbooks with real-time data, odds, stats, and audiovisual overlays, enabling frictionless betting.
Partnered with over 400 sports leagues, 800 betting operators, and 900 media companies, Sportradar covers 1 million matches annually across 70 different sports.
The company's leading presence in sports betting should only continue to grow following its recent announcement of Sportradar's unique acquisition of IMG Arena from Endeavor. Not only will Sportradar obtain IMG Arena's portfolio of global sports betting rights, but it will also receive $225 million to acquire these assets.
With Endeavor soon to be taken private by Silver Lake -- and the latter primarily wanting the company's talent agency and live events businesses, not its sports betting technology unit -- it was willing to pay Sportradar to part with IMG Arena.
IMG Arena's sports rights portfolio includes events such as three tennis majors and leagues such as the PGA Tour, the Ultimate Fighting Championship, and Major League Soccer.
These rights deepen Sportradar's existing sports portfolio, and management believes the deal will immediately increase the company's revenue and cash generation.
So should you watch Sportradar?
Guiding for at least 15% sales growth with improving free cash flow margins in 2025 (without including IMG Arena's benefit), Sportradar deserves to be on investors' radars.
