Why CVC triumphed in the battle for Tipico

Why CVC triumphed in the battle for Tipico

Monday, April 25, 2016 Totally Gaming
Tipico will pursue expansion with the boost of new funds following the sale

TotallyGaming.com understands that CVC Capital Partners beat off offers from at least two other private equity houses as it prevailed in the auction to acquire a majority stake in Tipico, Germany’s leading sports betting operator.

Just days after the company won a major victory in its fight for an online betting licence, Tipico sold off 60 per cent of its business to the investment firm which led William Hill’s IPO in 2002 and now owns Sky Betting & Gaming.

A source close to the deal said that CVC offered “the right price and the best strategy” and also demonstrated its industry expertise. With the deal set to be finalised in the third quarter of this year, Tipico is now to set to target an acceleration of growth Germany, as well as other markets, and an improved offering in terms of technology and customer experience.

The source added that both parties were keen for Tipico’s existing team, including president Jan Bolz, to retain a considerable share in the company, with CVC looking to employ their market acumen and entrepreneurial spirit. 

Some reports suggest the deal values Tipico at around €1.5bn ($1.7bn), with buyout group Centerbridge and Chinese investor XIO Group also believed to have made formal bids.

Tipico, a premium partner of German Bundesliga football club Bayern Munich, is the country’s largest private sports betting company, with around €500m in net revenue or €2.5bn in processed bets annually - nearly half of the domestic market.

While it currently relies on its 1,000 betting shops, Tipico took a big step towards gaining a full online licence in Germany after the Administrative Court of Hessen last week ruled that the regulatory authorities cannot block Tipico’s application as long as it met legal quality requirements.

Some 20 licensees were selected in 2014, but Tipico and others not included in that pre-defined number launched a legal challenge based on a perceived lack of transparency in the process. Tipico’s legal advisors, Redeker, Denton and Wuertenberger, said it could be the first half of next year before licences are awarded.

TotallyGaming.com says: “The news could not have come at a better time, with Tipico seemingly now assured of the opportunity to become Germany’s leading online operator from next year. It will be interesting to see if CVC, which bought William Hill in 1999 and then led its IPO three years later, will also look to take Tipico to the open market.” 


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