The Stars Group Acquires Sky Betting & Gaming for $4.7 Billion
The Stars Group Inc., the owners of PokerStars and Full Tilt Poker, announced on Friday that it inked a deal to acquire Sky Betting & Gaming (SBG) from CVC Capital Partners and Sky plc.
According to the press release, the deal is valued at a whopping $4.7 billion and will transform The Stars Group into the world’s largest publicly listed online gaming company.
The agreement calls for $3.6 billion to be paid in cash along with 37.9 million in newly-issued common shares valued at $1.1 billion based on the April 20, 2018 closing price.
When also factoring in the recent acquisitions of CrownBet and William Hill Australia, and its additional exposure to sports wagering with the SGB transaction, The Stars Group has transformed itself from a company that predominantly generated its revenues from poker, to one almost evenly spread out between its three biggest verticals. The revenue mix in 2017 for the combined company would have resulted in 37 percent of revenue derived from poker, 34 percent from sportsbook, and 26 percent from casino.
The acquisition also provides The Stars Group with a bigger footprint in the United Kingdom, the largest regulated online gaming market worldwide.
Other benefits of the acquisition were cited including improved products and technology relating to sportsbook and casino products, the addition of the sports wagering vertical as a second low-cost customer acquisition channel, and cost savings in the form of synergies of an estimated $70 million.
The Stars Group is excited about the acquisition which was unanimously by the company's Board of Directors. “The acquisition of Sky Betting & Gaming is a landmark moment in The Stars Group’s history,” said The Stars Group CEO Rafi Ashkenazi in the press release. “SBG operates one of the world’s fastest growing sportsbooks and is one of the United Kingdom’s leading gaming providers. SBG’s premier sports betting product is the ideal complement to our industry-leading poker platform. The ability to offer two low-cost acquisition channels of this magnitude provides The Stars Group with great growth potential and will significantly increase our ability to create winning moments for our customers.
"Following this transaction, The Stars Group will have significantly enhanced scale and a highly-regarded global brand portfolio. As a result, we are well positioned to realize our vision of becoming the world’s favorite iGaming destination.”
SGB is pleased to be joining The Stars Group while also thanking the support from its previous owners CVC and Sky.
“We are delighted to join forces with The Stars Group,” said Sky Betting & Gaming CEO Richard Flint. “We have had a fantastic last few years and would like to thank CVC and Sky for supporting us in becoming a leading online operator in the UK. This transaction allows us to offer our best-in-class products to a truly global audience. We’re excited about our future together.”
The deal is expected to close during the third quarter of 2018. While shareholder approval is not needed for the acquisition, completion of other customary closing conditions and approvals from regulatory authorities including the Toronto Stock Exchange and NASDAQ are required before the deal is officially closed.
The Stars Group is a majority shareholder in iBus Media