British private equity firm Apax Partners has divested its remaining shares in Genius Sports, as revealed in a press release on Wednesday morning. Previously the largest shareholder, Apax owned 20 million shares, representing just under 10% of the sports data company.
Over the past year, Apax had been systematically reducing its stake in Genius Sports. In September, the firm began selling 23 million shares, bringing its holdings down to 31 million shares by the end of 2023. This was further reduced to 20 million shares after the first quarter of 2024, with the block sale distributed among new and existing shareholders.
Apax initially acquired a majority interest in Genius Sports in 2018, investing $35 million to support the company's expansion in global sports data and analytics. In 2021, Genius Sports went public on the New York Stock Exchange (NYSE: GENI) via a SPAC merger, which reduced Apax’s stake to approximately 28%.
Following the announcement of the final sale, Genius Sports' stock remained flat at the market open but closed down 1.7% at $5.36 per share on Wednesday. The stock has declined 9% year to date.
While the substantial share sale might exert bearish pressure on Genius Sports' stock in the short term—20 million shares is roughly 12 times the daily trading volume—it could benefit the business in the long term. The increased float, or shares freely available for trade, may attract more outside investment funds. These funds often prefer stocks with higher liquidity, allowing them to buy or sell without significantly impacting the share price. Genius Sports has indicated its desire to attract a new long-term shareholder base.
"Today marks the conclusion of a very successful partnership, and we look forward to welcoming this next chapter with the ongoing support of our high-quality institutional shareholders," said Mark Locke, Genius Sports' CEO and founder.
Apax's initial investment in Genius Sports came when the company generated $85 million in revenue. Last year, Genius Sports reported revenue of $413 million and expects to reach $500 million in revenue in 2024. With Apax's exit, Mark Locke remains the largest shareholder, followed by Caledonia Investments and the NFL.
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