The Stars Group completes $4.7B Sky Betting & Gaming purchase
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The Stars Group Inc. made an announcement that it had agreed to acquire Sky Betting & Gaming from CVC Capital Partners and Sky plc for $4.7 billion.
This came as a shocker to the gaming enthusiasts and the industry at large as the combination would result in the world’s largest gaming company publicly listed.
According to Rafi Ashkenazi, The Stars Group CEO, the acquisition of Sky Betting & Gaming was a landmark moment for the company’s history. It is important to understand that Sky Betting & Gaming is UK’s leading gaming provider and the world’s fastest growing sportsbooks. Its premier sports betting product is somewhat the pillar to our industry-leading poker platform. The Stars Group will now enjoy a great growth potential considering that it will now have the ability to offer two low-cost acquisition chances of this magnitude. So the CEO said that “this will significantly increase our ability to create winning moments for our customers.”
According to Mr. Ashkenazi, this transaction means that the Stars Group will not only enjoy a significantly enhanced scale, but it will also have a highly-regarded global brand portfolio. He added, “we are well positioned to realize our vision of becoming the world’s favorite Gaming destination.”
This acquisition is remarkable as it will provide The Star Group with multiple operational and financial benefits.
Here is what is up for grabs from this deal:
Enhanced exposure to sports betting and greater revenue diversification. Betting is the world’s largest and fastest growing online gaming segment. It is important to understand that the majority of SBG’s revenue comes from sports betting.
With the UK market being the world’s largest regulated online gaming market means the increased presence in this market.
The addition of Sky Betting & Gaming innovative casino and sportsbook offerings will improve products and technology.
What is Sky Betting & Gaming?
Sky Betting & Gaming as we speak is UK’s largest active online player base. It also happens to be the leading mobile betting and gaming operator considering over 80% of revenues generated from mobile devices.
Sky Betting & Gaming has partnered with Sky, Europe’s leading broadcaster and media company to develop online gaming’s most well-known sites like Sky Vegas, Sky Casino, and Sky Bet.
The company’s unaudited annual revenue was £624 million and £202 million of unaudited adjusted EBITDA within a period of 12 months that ended on December 31, 2017.
The $4.7 Billion Purchase
The Star Group Inc. is the owner of BetStars, PokerStars, and Full Tilt brands. The group is also thinking of posing a secondary offering of 6 million shares. The price and the total size of this will be determined after an underwriting agreement.
The acting joint book-running managers and representatives of the underwriters are JPMorgan, Morgan Stanley and Deutsche Bank securities.
The Star Group’s mission is to use net proceeds from treasury offering with cash on hand and debt financing, to fund the acquisition. But there are conditions to this acquisition like the listing of the treasury common shares on the Stock Exchange and the Nasdaq and the approval of the Stock Exchange.
The securities regulatory authorities have already received Preliminary Supplement in each of the provinces and territories in Canada and the Securities and Exchange Commission in the US.
It is important to note that the Stars Group stock rose up by 70% since January. It was able to hit an all-time high of C$50 in June before it dropped just under that mark on 15th of June. The company has high hopes in this purchase as it expects to profit from legal sports betting in the US following May’s ruling by the Supreme Court.
The company also reported a 23% year-on-year increase in its revenues in the first quarter of 2018. The purchase is believed to be a stepping stone for the company to continue providing technology-based product offerings in the interactive entertainment industries and global gaming. Sky Group also owns brands such as the European Poker Tour, Latin American Poker Tour, PokerStars Caribbean Adventure, PokerStars Festival, Asia Pacific Poker Tour and many more. So it goes without saying that the combination opens a new and exciting chapter for Sky Betting & Gaming to accelerate the international growth.
Source: European Gaming Industry News