Paddy Power gambles on games business

Online and high street bookmaker Paddy Power has agreed to buy CT Networks (Cayetano), in a deal which will largely be valued on the future performance of the business.


Online and high street bookmaker Paddy Power has agreed to buy CT Networks (Cayetano), in a deal which will largely be valued on the future performance of the business.

Online and high street bookmaker Paddy Power has agreed to buy CT Networks (Cayetano), in a deal which will largely be valued on the future performance of the business.
 
Headquartered in the Isle of Man, Cayetano is a games developer and has produced products for the online and mobile gaming markets using a team of software developers and graphic designers based in Bulgaria.
 
According to a statement, the agreed consideration is capped and the majority of the maximum amount due is payable subject to performance over a number of years.
 
Cayetano is one of the best developers of its kind in the e-gaming sector, says Patrick Kennedy, chief executive of Paddy Power.
 
He adds: ‘Its acquisition will provide Paddy Power with a compelling range of online gaming products as well as a new internal source of gaming development expertise.’
 
Kennedy says that Paddy Power has already built a strong ‘in-house’ IT and product development capability, but that Cayetano is a ‘natural extension’ of this existing service and reflects its ‘evolving product mix’.
 
The deal for CT Networks (Cayetano) is the latest in a number of transactions in the industry which have been evident in the 2011 UK M&A market.
 
High street competitor Ladbrokes moved further into the US sports betting market in May with the £8.56 million deal to acquire Brandywine.
 
Online business Sportingbet has made a number of deals this year including the purchase of Scandinavian companies Danbrook and Scandic, and the sale of its Turkish language website to East Pioneer.
 
In a highly publicised deal, UK-based bookmakers Betfred won the battle to secure the purchase of the Tote from the government in a deal worth £265 million in June, following an auction process that began in November last year.
 
Commenting on the deal for Cayetano, chief executive officer Nick Maughan, comments: ‘This is a great step for Cayetano and its team. We’re all excited at the prospect of being part of Paddy Power, a business whose success in this market has been built on an exceptional understanding of online customers and product trends.’
 
In an interim management statement released by Paddy Power, the Dublin-headquartered business raised its outlook for full-year earnings growth following a ‘strong’ performance in its main betting business since June.
 
It now expects full-year earnings per share to rise by 15 to 20 per cent year-on-year.
 
In the period from July to November 14, it says its UK and Irish online business saw amounts placed on sportsbook eventes increase by 31 per cent.

Todd Cardy

Todd Cardy

Todd was Editor of GrowthBusiness.co.uk between 2010 and 2011 as well as being responsible for publishing our digital and printed magazines focusing on private equity and venture capital.

Related Topics