Endeavor Group Holdings is acquiring Scientific Games’ sports betting unit OpenBet for US$1.2 billion in cash and stock, Scientific Games has announced in a news release.

Endeavor, the owner of the Ultimate Fighting Championship, said the acquisition will strengthen its position in the sports betting industry.

The company said it plans to combine OpenBet, a sportsbook and gaming software, with its existing sports betting business IMG ARENA, which already works with more than 470 leading sportsbook brands worldwide.

The deal is expected to close in the second quarter of 2022.

“This transformational announcement combines OpenBet’s market-leading sports betting ecosystem with unparalleled access to sports rights, content and data across the Endeavor portfolio,” said Jordan Levin, Chief Executive of Scientific Games’ Digital business. “Together, we are uniquely positioned to define the future of sports betting entertainment. Putting our customers and their players at the heart of our product and technology innovation will remain the key to our ongoing success. The team at OpenBet is second to none and we’re laser focused on the rapid expansion of the global sports betting market.”

OpenBet, which Scientific Games acquired in 2018 as part of its CAD$775m takeover of NYX Gaming, specializes in betting engine technology, risk management, player account and wallet solutions, and content offerings, and focuses exclusively on licensed customers and regulated global gaming markets. It serves a customer base that includes top-tier sportsbooks such as DraftKings, theScore, BetMGM, FanDuel, WynnBet, SkyBet, Ladbrokes, and William Hill.

Las Vegas-based Scientific Games announced this summer its plan to divest its lottery and sports-betting businesses in order to pivot towards an increased focus as a gaming and digital content provider. Other industry leaders have made similar moves, such as IGT’s recent creation of a new Digital & Betting segment that will include the iGaming and sports betting activities that were previously part of its Global Gaming division.

The announcement comes at a time of rapid expansion and evolution of the online gaming and sports betting space across North America as online gaming has boomed throughout the pandemic.

Last week, British gambling firm Entain said it had received a takeover proposal from U.S. fantasy sports betting company DraftKings, valuing it at US$22.4 billion.