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Australia – Stars Group buys William Hill Australia via CrownBet
By 필 -6 년 2018 월 XNUMX 일
British sports betting operator William Hill has sold its Australian business to CrownBet claiming that regulatory changes forced it to leave the market and write down the value of the business.
The deal was preceded by Canada-based Stars Group, owner of PokerStars, increasing its share holding in CrownBet from 62 per cent to 80 per cent. Stars Group said it wanted to create ‘a leader in the regulated Australian online sports betting market.’
The aggregate purchase price for both transactions will be approximately $315m, of which $234m will be payable in cash for William Hill Australia and the remainder will be payable in approximately 3.1m newly-issued common shares of The Stars Group for the increased equity interest in CrownBet.
Rafi Ashkenazi, pictured, CEO of The Stars Group, said: “These acquisitions will further increase our exposure to the attractive regulated Australian sportsbook market and create a player of scale and clear rival to the top two operators there. With complementary geographic profiles, we expect the combined business to leverage CrownBet’s operating and proprietary technology platform and be well positioned for growth and to navigate the ongoing regulatory and taxation changes in the Australian market.”
In 2017, William Hill Australia generated unaudited annual revenues of A$190.5m while CrownBet generated annual revenues of approximately A$204m.
Matthew Tripp, Chief Executive Officer of CrownBet, added: “I am excited to partner with The Stars Group. We believe the acquisition of the William Hill Australia business gives us the scale and customers to become a leading force in the market and the tools we will need to prepare for potential positive regulatory movement in other jurisdictions.”
William Hill’s presence in the Australian sports betting market evolved through the 2013 acquisitions of Sportingbet and tomwaterhouse.com. At the time of its acquisition by William Hill, the Sportingbet business in Australia included both Centrebet and a sports betting business founded by Mr. Tripp and his family. Following the acquisitions, William Hill changed the brands to William Hill Australia and migrated all customers to its platform.
CrownBet’s management team, including Mr. Tripp, will operate the combined business in Australia, which The Stars Group currently estimates will realize gross cost synergies of approximately A$50m per year beginning in 2019 after a period of expected incremental integration and rebranding costs. The Stars Group anticipates such synergies to exceed the potential impact from expected point of consumption taxes in Australia.
William Hill said it was ‘clear that profitability will increasingly come under pressure’ following new laws in Australia. South Australia introduced a point of consumption tax last year, making betting companies pay 15 per cent of their net revenue from bets. The fear is that Western Australia, Queensland and Victoria will now follow suit.
William Hill’s Chief Executive Philip Bowcock, said: “The disposal follows a strategic review of the Business, launched in January after its profitability came under increased pressure due to the recent credit betting ban and the likely introduction of a Point of Consumption tax. The disposal will allow William Hill to focus on continuing to grow our UK Online and US businesses.”
William hill’s Australian business accounted for seven per cent of William Hill’s revenue and almost six per cent of operating profit in 2017.
CrownBet only launched four years ago in Australia but is one of the country’s fastest-growing online sports bookmakers generating revenues of A$204m in 2017. It operates licensed betting, over the telephone, internet and mobile phone platforms and has about 284,000 customers.
