Irish bookmaker Paddy Power Plc has taken a 51 per cent stake in Sportsbet Pty, an Australian bookmaker that targets customers through telephone and online channels, for an initial payment of AU$48.5 million (£24 million).
Irish bookmaker Paddy Power Plc has taken a 51 per cent stake in Sportsbet Pty, an Australian bookmaker that targets customers through telephone and online channels, for an initial payment of AU$48.5 million (£24 million).
The consideration will be satisfied through a cash payment of AU$45.8 million from Paddy Power’s existing cash pool and the issue of 100,000 Paddy Power shares to Sportsbet shareholders. An additional payment of AU$10 million will be made to Sportsbet early in 2010 if the company’s EBITDA exceeds AU$16.5 million this calendar year before transaction and restructuring costs.
Paddy Power also has a call option, exercisable in either 2012 or 2013, to acquire all of the outstanding shares in Sportsbet that it does not own.
Sportsbet has been in operation for more than 15 years and is one of Australia’s largest corporate bookmakers. The acquisition is in line with the Irish bookmaker’s development strategy to expand internationally and “leverage its existing expertise”.
Paddy Power will relocate a number of its managers to Australia and bring marketing, e-commerce and risk and product expertise to Sportsbet. Matthew Tripp, Sportsbet’s CEO and controlling shareholder, will remain in the position. Paddy Power will appoint four directors to the Sportsbet board, including Patrick Kennedy and Breon Corcoran.
Patrick Kennedy, Paddy Power’s chief executive, said: “Sportsbet has a strong, well-run business together with plenty of potential to build on its market position in Australia. The acquisition adds a new dimension to our business portfolio to which we can bring trading, risk management and marketing expertise honed in Ireland and the UK to complement Sportsbet’s existing skills and experience.”
The acquisition is conditional on the approvals of the Australian Foreign Investment Review Board and the Northern Territory Racing Commission. It is expected to complete on 1 July 2009.
