It has been a long time coming but Ladbrokes chief executive Richard Glynn has made his first acquisition since taking charge at the world-leading sports betting operator, with a deal struck at an initial €30m to take control of the betting exchange.
The deal means that Ladbrokes take over Global Betting Exchange Alderney Limited – the Alderney-licensed operator of the Betdaq business – while also taking a 10% stake in the company’s Channel Islands-based technology provider TBH Guernsey Ltd.
Glynn has previously been unsuccessful when it has come to takeover talks involving 888 and Sportingbet, while he pulled out of the race for Australia’s Centrebet after initial discussions with the overseas operator.
However, the fact that Betdaq owner Dermot Desmond is a 2% shareholder of Ladbrokes meant that the deal could be more easily facilitated and the agreement will see half of the initial consideration settled in Ladbrokes shares, with an earn-out to be paid based on the growth in GBEA’s gross profits between the last financial year and the year ended 31 December 2016.
Desmond himself will receive the €15m in shares although his Ladbrokes holding won’t be affected by the takeover.
Glynn said the “bolt on” acquisition – which will be completed subject to relevant regulatory approvals – “…[P]rovides us with an exciting opportunity to grow our share of wallet through the creation of a differentiated and comprehensive sports betting proposition for customers and also supports our drive for improved liability management.”
Glynn also described Betdaq as “A well-regarded and well invested business and a close strategic fit for Ladbrokes.”
Ladbrokes have previously used Betdaq to hedge several bets, although the latter is roughly twenty times smaller than market-leading exchange Betfair who won’t be too concerned by this transaction despite their share price continuing to stumble.
Betdaq generated profit after tax of €2.8m in the year to the end of December and had gross assets of €35.4m.
Of the €30m, €15m will be in Ladbrokes shares. Ladbrokes will also take a 10pc stake in TBH, the technology provider to Betdaq.
Labrokes shares rose 2.2pc in early trading on Thursday morning.