Paddy Power raises stake in Sportsbet to nearly 61pc
Paddy Power has spent €8.5m to snap up a further stake in Australian gambling outfit Sportsbet, bringing its current holding in the firm to nearly 61pc.
The Irish betting firm made its first foray into the Australian market last year when it paid €27.2m for a 51pc stake in Sportsbet, which was established back in the early 1990s, and provides online and telephone betting services. Paddy Power appointed four directors, including chief executive Patrick Kennedy, to the Sportsbet board when it acquired the holding.
In a statement to the stock exchange yesterday, Paddy Power said that it acquired the additional 9.8pc shareholding from a minority shareholder who had no executive involvement. It paid A$13m (€8.4m) in cash for the stake.
The remaining 39.2pc of Sportsbet's shares remain subject to the transaction agreement drawn up last year. That includes a contingent A$10m consideration subject to Sportsbet's earnings before interest, tax, depreciation and amortisation exceeding A$26m, and Paddy Power's call option to acquire any minority shareholding, in either 2012 or 2013.
The implied enterprise valuation of Sportsbet, and its International All Sports subsidiary, as a result of yesterday's transaction, is A$185m. Shares in Paddy Power closed up 2.3pc in Dublin yesterday at €24. Shares in the company have more than doubled in the past 12 months.