CVC returns to gambling with Sky Bet purchase

CVC returns to gambling with Sky Bet purchase

Thursday, December 4, 2014 Totally Gaming

A year after failing in its bid to buy Betfair, and 12 years after it floated William Hill, the largest buyout group in Europe has bought a controlling interest in Sky Betting and Gaming (Sky Bet).

Private investment firm CVC Capital Partners today agreed to buy 80 per cent of Sky Bet from entertainment group Sky in a deal worth £800m (€1bn/$1.3bn), which is around 15 times the betting company's EBITDA. 

The deal means that Sky will enjoy ongoing board representation and a long-term brand licence agreement with Sky Bet. The agreement will also see managing director Richard Flint retain his position, while the online gaming brand’s management team will also remain in place under the new ownership structure.

Rob Lucas, managing partner of CVC, said: "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 Sky Bet's ongoing success at this exciting point in its development."

Under the agreement, Sky will receive cash of £600m on completion and further deferred and contingent consideration up to the value of £120m. All Sky Bet employees will move across to the new entity while the business will remain headquartered in Leeds, UK. 

Sky Bet generated revenue of £183m in the year to June 30, 2014, which represented an increase of 18% on the previous year.

Jeremy Darroch, Sky chief executive, said: "In the last 10 years, we have successfully grown Sky Bet 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."

CVC made its original approach to Betfair in April 2013, but the bid was rejected. It then submitted two revised offers during May, eventually valuing the company at £988m.  Both offers were turned down, and CVC confirmed in a statement that as it was unable to agree financial terms it had "no intention of making an offer for Betfair". 

However, CVC is not new to the gambling industry, having bought William Hill for £825 million in 1999 before it was floated on the stock exchange with a value of more than £1 billion three years later.
 

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