William Hill has acquired partner Playtech for £424m to take full control of its online business, marking the second major acquisition of the quarter by Britain’s largest bookmaker. William Hill is expected to raise £375m in a rights issue to help fund the acquisition together with approximately £50m from its 2012 Bridge Credit Facility. The transaction must be completed before the end of April 2013 and is subject to approval by William Hill shareholders. Earlier, William Hill paid £460m to takeover the Australian and Spanish operations of online gambling company Sportingbet, the deal is scheduled to complete on March 19.
The Playtech acquisition for the agreed price of £424m would represent a multiple of approximately 11.5 times normalised 2012 EBITDA and is to be settled entirely in cash, with Playtech receiving a proportionate share of 2013 profit from William Hill Online up to the date of completion. Playtech holds 29% stake in the William Hill online venture, formed at the end of 2008.
The acquisitions would mark major transformation for William Hill, set up in 1934 and a familiar name on the British high street where it has more than 2,000 betting shops across the country. William Hill has been aiming to strengthen its overseas operations and continue its strong growth in online gambling.
Playtech, a technology and services supplier, said that it would conduct a broad review in order to determine the best use of the proceeds from this transaction, including the potential for further acquisitions, joint ventures and partnerships focussing on regulated markets.
William Hill’s chief executive Ralph Topping, said about the Playtech acquisition, “This move rounds off a successful 12 months which have seen us take our first steps into the US and, through the pending Sportingbet acquisition, lay the foundations for growth in the attractive Australian market.”