Unibet to acquire Betchoice

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Unibet (SBR rating B-) Sportsbook has signed an agreement to acquire Betchoice. Unibet will enter the regulated Australian betting market. Unibet's acquisition price is £13.6 million; the deal, which transfers 100% of Betchoice Corporation Pty Ltd.'s shares, is said not to contain any liabilities. Completion of the deal is still subject to approval by the Northern Territory regulator; this process is expected to be completed before the end of Q2 2012.

Unibet intends to completely rebrand BetChoice to Unibet following what they refer to as a "short transition period". Unibet CEO Henrik Tjärnström spoke of the acquisition in an official company press release distributed this morning.

 

 

Unibet CEO Henrik Tjärnström: “This strategic acquisition gives Unibet immediate access to the regulated Australian market, which is currently open to sports betting and horse racing. We intend to rebrand the business quickly to Unibet. Betchoice already has a strong offering and market position in horse racing and through Kambi, Unibet has the opportunity to enhance the quality and performance of Betchoice’s sports betting offering and so to deliver revenue growth and margin improvements... In addition to benefit from the already existing Australian product offering, the acquisition of Betchoice will provide Unibet with a platform to facilitate other gambling services and opportunities should market conditions continue to improve.”


SBR expects Unibet to refine its standards of enforcing house rules as they enter a regulated Australian market. Though Unibet is licensed by the Lotteries and Gaming Authority (LGA) of Malta; SBR has found that operators prefer Malta for its lax positions on player disputes and the ease of setting up shop. Unibet's operating procedure has until this point been to cut off communications with a player determined to be in violation of house rules, and has not been willing to fully satisfy SBR's inquiries in regards to player confiscations, such as in this sportsbook dispute reported in December of 2011.

SBR will attempt to revisit outstanding claims with Unibet, hoping that the company's recent good news will compel it to more satisfactorily address player disputes. | Read the full Unibet press release

 

 

Unibet Group plc, "Fawwara Bldgs", Msida Road, Gzira GZR1402, Malta
Tel: +356 2133 3532 Fax: +356 2343 1510 Website : www.unibetgroupplc.com Email:info@unibet.com
Registered office: c/o Camilleri Preziosi, Level 2, Valletta Buildings, South Street, Valletta, Malta. Company No: C 39017. Registered in Malta.
Press information Malta, 7 February 2012
Unibet signs agreement to acquire Betchoice
and enter the regulated Australian market
• Acquisition of 100% of the issued shares of Betchoice Corporation Pty Ltd, one of
the leading independent corporate bookmakers online offering Racing and Sports
betting products in Australia.
• Provides access to the regulated Australian online market which is growing at
circa 10-15% per annum.
• Betchoice has a customer base of more than 8,000 active customer accounts and
introduces horse racing capability into Unibet which can be leveraged across its
existing business.
• Unibet’s second strategic acquisition in recent months of businesses in regulated
markets following the acquisition of the Solfive Group in France in November last
year.
• Unibet plans to invest in development of both product offering and marketing to
grow the market share aggressively and to challenge the leading players in the
Australian market. Unibet considers the Australian corporate bookmaking market to
have relatively attractive terms and conditions compared to European models and
therefore allows for profitable growth.
• Initial acquisition price of AUD 20.0 million (GBP 13.6 million) on a cash free and
debt free basis payable on completion.
• Earn-out based on 5.5x 2014 EBITDA in Australia less the initial acquisition price
for Mark Morrissey, founder, Chairman and 38% shareholder, who is remaining with
the company.
• Certain other shareholders to receive a payment of AUD 2.4 million in aggregate if
2014 EBITDA in Australia exceeds AUD 4.4 million.
• Completion is subject to the approval by the Northern Territory regulator and is
expected before the end of Q2 2012.
• Betchoice achieved EBITDA of AUD 3.3 million (GBP 2.2 million) for its latest
financial year ended 30 June 2011. Gross turnover for racing and sports betting for
the year ended 30 June 2011 was AUD 191.5 million (GBP 129.8 million).
Unibet Group plc today announces that it has signed an agreement to acquire 100 per cent of
Betchoice Corporation Pty Ltd, one of Australia’s leading independent corporate bookmakers online.
Betchoice operates a range of sports and racing betting products in the Australian market through its
web site www.betchoice.com.
The transaction, which is Unibet’s second in a regulated market in recent months:
• Provides access to the fast growing Australian online market;
• Represents a solid platform from which to invest further and gain market share;
• Positions Unibet well for the anticipated opening of live betting products in Australia at some
stage in the future;
• Provides Unibet with horse racing capability which can be leveraged further across the group
Unibet Group plc, "Fawwara Bldgs", Msida Road, Gzira GZR1402, Malta
Tel: +356 2133 3532 Fax: +356 2343 1510 Website : www.unibetgroupplc.com Email:info@unibet.com
Registered office: c/o Camilleri Preziosi, Level 2, Valletta Buildings, South Street, Valletta, Malta. Company No: C 39017. Registered in Malta.
The initial acquisition price is AUD 20.0 million (GBP 13.6 million), on a cash free and debt free basis,
payable in cash on closing. In addition, there is an earn-out for Mark Morrissey, founder, Chairman
and 38% shareholder based on 5.5x 2014 EBITDA in Australia less the initial acquisition price who will
remain with the business post completion. A further AUD 2.4 million in aggregate will be payable to
ceratin other shareholders, if 2014 EBITDA in Australia exceeds AUD 4.4 million.
Completion of the transaction is subject to approval by the Northern Territory Racing Commission and
is expected to take place before the end of the second quarter of 2012.
Unibet intends to rebrand the platform from Betchoice to Unibet following a short transition period.
Over the next two years, Unibet will invest significantly in improving the Australian product portfolio
and in marketing to establish the Unibet brand in the fast growing Australian market. Applying the
wider sports product range and risk management techniques within Kambi, Unibet’s B2B Sportsbook
division, to Betchoice will improve Betchoice’s offering and financial performance. Kambi will also
benefit from integrating Betchoice’s racing product within its portfolio.
As a result of the initial strategic investments to support future growth, Unibet does not expect the
acquisition to have a significant financial impact on Unibet’s reported profits for 2012. The acquisition
is not expected to impact the proposed dividend for 2011 to be announced in connection with the 2011
year end report.
Betchoice currently employs around 35 people in Australia who will be integrated into the Unibet team.
Betchoice operates under a Northern Territory sports bookmaking licence and has offices in Darwin
and Sydney.
“This strategic acquisition gives Unibet immediate access to the regulated Australian market, which is
currently open to sports betting and horse racing. We intend to rebrand the business quickly to Unibet.
Betchoice already has a strong offering and market position in horse racing and through Kambi,
Unibet has the opportunity to enhance the quality and performance of Betchoice’s sports betting
offering and so to deliver revenue growth and margin improvements,” says Henrik Tjärnström, CEO
Unibet.
“In addition to benefit from the already existing Australian product offering, the acquisition of Betchoice
will provide Unibet with a platform to facilitate other gambling services and opportunities should market
conditions continue to improve.”
Mark Morrissey, co-founder and Chairman of Betchoice says, “We are delighted to become part of the
wider Unibet group. There is a substantial market opportunity in Australia and with Unibet’s expertise
in marketing and risk management, together with its market-leading sports betting offering, I am
confident that we can increase substantially our market share and establish Unibet as one of the
leading brands in Australia.”
For more information:
Henrik Tjärnström, CEO Unibet +44 7515 975 629
Inga Lundberg, Investor Relation +44 788 799 6116
About Unibet
Unibet was founded in 1997 and is an online gambling company listed on NASDAQ OMX Nordic Exchange in Stockholm.
Unibet is one of the largest privately-owned gambling operators in the European market and provides services in 27 languages
through www.unibet.com, www.unibet.dk, www.unibet.fr, www.unibet.it, www.maria.com and www.mariacasino.dk .
Today, Unibet has more than 6 million customers in over 100 countries. Unibet is a member of the EGBA, European Gaming
and Betting Association, RGA, Remote Gambling Association in the UK and is audited and certified by eCOGRA in relation to
responsible and fair gaming.
More information about Unibet Group plc can be found on www.unibetgroupplc.com

 

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