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.