CVC Capital Partners is to spend a potential £720m to buy a controlling stake in online bookmaker Sky Bet. Under the agreement, Sky will receive £600m on completion of the deal, and further deferred and contingent payments of up to £120m, while Sky will retain an equity stake of 20% in Sky Bet, with which it has entered a long-term brand licence agreement.
The broadcaster said that the sale ‘crystallises value’ for Sky that has been created in Sky Bet, while the price represents a multiple of approximately 15x EBITDA for the 12 months ended 30 June 2014, reflecting Sky Bet’s record of strong growth and high cash generation.
Sky chief executive Jeremy Darroch said: “In the last ten years, we have successfully grown Sky Bet from a start-up to one of the leading online betting and gaming companies in the UK. This transaction will allow us to focus further on the substantial growth opportunities in our core international pay TV business while realising significant value for our shareholders.”
The acquisition includes Sky Bet, its sports betting business; Sky Vegas & Sky Casino, its casino gaming businesses, Sky Poker and Sky Bingo, and Oddschecker, the UK’s leading odds comparison site. The deal is subject to regulatory clearances in the UK and Ireland and is expected to be completed in the first three months of 2015.
The Sky Bet management team, under the leadership of managing director Richard Flint, will remain with the business under the new ownership structure with all Sky Bet’s employees moving across into the new entity. The business will remain headquartered in Leeds.
Flint said: “Over the last 7 years, Sky Bet has grown rapidly to become one of the UK’s leading online betting and gaming operators, achieved through the hard work of our employees and the valuable support of Sky and Sky Sports. Looking forward, we have exciting growth opportunities, both in the UK and internationally. Today’s transaction brings in CVC as a new majority investor who will support us in the exciting next phase of our development, and retains the benefits of Sky’s and Sky Sports’ continuing involvement. CVC brings a broad international network, has an excellent track record of building businesses, as well as valuable experience in the betting & gaming sector, through previous investments in companies such as William Hill and IG Group.”
Rob Lucas, managing partner of CVC, said: “We are delighted to have agreed to acquire a controlling stake in Sky Bet. Richard Flint and his team have built a fantastic business, which is a leader in the fast growing mobile and online, betting and gaming markets. The partnership between CVC and Sky will provide a strong platform to support SkyBet’s ongoing success at this exciting point in its development.”