Sky Bet sold to CVC for £800m
December 4, 2014
Sky has sold its online betting and gaming business, Sky Betting & Gaming (Sky Bet), to CVC Capital Partners (CVC) in a deal which values Sky Bet at £800 million (€1.018bn).
The sale releases the value for Sky that has been created in Sky Bet, and enables the enlarged Sky to focus on pay-TV across the five markets in which it now operates.
Sky will receive cash of £600 million on completion and further deferred and contingent payment of up to £120 million. The total value of £800 million represents a multiple of approximately 15x EBITDA for the 12 months ended 30 June 2014. Sky will retain an equity stake of approximately 20 per cent in Sky Bet and ongoing board representation. As part of the transaction Sky has also entered into a long-term brand licence agreement with Sky Bet.
Sky Bet was formed in 2001 and has grown rapidly to become one of the leading operators in the UK’s online betting and gaming market, through its strong partnership with Sky Sports and its track record of technology and product innovation. Sky Bet was one of the first operators to recognise the potential of online and mobile platforms for betting and gaming, and today operates a range of sports, betting and gaming services.
The Sky Bet management team, under the leadership of Managing Director Richard Flint, has been instrumental to Sky Bet’s success. They will remain with the business under the new ownership structure with all Sky Bet’s employees moving across into the new entity. The business will remain headquartered in Leeds.
Jeremy Darroch, Group Chief Executive of Sky, said: “In the last ten years, we have successfully grown Sky Bet from a start-up 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.”
The transaction is subject to regulatory clearances in the UK and Ireland and is expected to close in the first quarter of 2015.
CVC’s local knowledge, relevant sector expertise and extensive contacts underpin a 31 year proven track record of investment success. CVC has a strong track record of investing in the betting and gaming sector, including successful previous investments in William Hill and IG Group; and CVC is the controlling shareholder of the Formula One Group, an important content partner for Sky.