News

Paddy Power enters Australia with Sportsbet buy 14/05/2009

Jake Pollard

Paddy Power has entered the Australian market by buying a controlling stake in Australian bookmaker Sportsbet.

The 51% stake is for an initial consideration of AUD48.5m (€27.2m).

The Irish bookmaker will make an initial cash payment of AUD45.8m (€25.7m) from its existing cash reserves of €96m, and issue of 100,000 Paddy Power shares to Sportsbet shareholders.

An additional cash consideration of AUD10m (€5.6m) will be made to Sportsbet shareholders in early 2010 if the company’s earnings before interest, tax, debt and amortisation (EBITDA) in 2009 (before transaction and restructuring costs) exceeds AUD16.5m (€9.2m). Sportsbet has already forecast EBITDA of AUD14.6m (€8.2m) for the year ending 30 June 2009.

Sportsbet chief executive and its current controlling shareholder Matthew Tripp will continue in his role. Paddy Power will appoint four directors to the Sportsbet board, including chief executive Patrick Kennedy and head of non-retail and online Breon Corcoran.

Sportsbet is a long established Northern Territory-licensed private operator, and owns 19.98% of International All Sports.

Under the terms of the acquisition, in the event that Sportsbet’s EBITDA for any of the years ending 30 June 2010, 2011 or 2012 is less than AUD11m (€6.2m), Paddy Power has the right to claw equity from Sportsbet’s existing shareholders on a proportionate basis to the shortfall in profitability.

Patrick Kennedy said: “The acquisition adds a new dimension to our business portfolio to which we can bring trading, risk management and marketing expertise honed in Ireland and the UK to complement Sportsbet’s existing skills and experience.”

At Paddy Power's annual general meeting today, chairman Nigel Northridge will highlight the company's "strong performance" in 2008 (more).

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Posted: 14/05/2009

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