CrownBet Holdings has acquired the Australian division of UK Bookmaker William Hill for a reported $233 million.
According to CDC Gaming reports, the sale is for an enterprise value of A$300 million ($233 million), equivalent to an equity value of A$313.7 million.
The deal is subject to regulatory approvals from the Australian Foreign Investment Review Board and the Northern Territory Racing Commission, which William Hill expects will be obtained in a timely manner.
“We are pleased to announce the sale of William Hill Australia to CrownBet. The disposal follows a strategic review of the Business, launched in January after its profitability came under increased pressure due to the recent credit betting ban and the likely introduction of a Point of Consumption tax,” CEO Philip Bowcock said in a press release. “The disposal will allow William Hill to focus on continuing to grow our UK Online and U.S. businesses, particularly as we prepare for the decision on the PASPA appeal due in 2018.”
Disposal proceeds, net of costs, will be used initially to reduce group indebtedness and invested to support further growth of William Hill, the release said.
The sale comes after William Hill recently devalued its Australian division saying it has been hurt by Australian laws prohibiting gambling companies from offering lines of credit to gamblers. The company said bets at the site had fallen 15 percent in the last half of 2017 as it prepared for the restriction to go into effect. In 2017, William Hill Australia had revenues of A$201 million and EBITDA of A$47 million.
Several Australian states are also expected to impose point of consumption taxes on online gambling sites. The company had put the division under strategic review.
As many as four bookmakers were reported to be interested in acquiring William Hill Australia, but reports said the final bidding came down to CrownBet and Paddy Power Betfair.
CrownBet last month saw the Stars Group acquire 62 percent of the firm for $117 million. In a market update, however, Stars Group said it will move to increase its equity in CrownBet to 80 percent. Stars Group will pay about $315 million for both transactions with $234 payable in cash for William Hill Australia.
“These acquisitions will further increase our exposure to the attractive regulated Australian sportsbook market and create a player of scale and clear rival to the top two operators there,” said Rafi Ashkenazi, CEO of the Stars Group in a press statement. “With complementary geographic profiles, we expect the combined business to leverage CrownBet’s operating and proprietary technology platform and be well positioned for growth and to navigate the ongoing regulatory and taxation changes in the Australian market.”
