Sky agrees sale of Sky Bet to CVC Capital Partners
Sky has agreed to sell a controlling stake in its online betting and gaming business, Sky Betting & Gaming (“Sky Bet”), to funds advised by CVC Capital Partners (“CVC”) in a deal which values Sky Bet at £800 million.
The sale crystallises value for Sky that has been created in Sky Bet, and enables the enlarged Sky to focus on the significant opportunity for growth in pay TV across the five markets in which it now operates.
Under the terms of the transaction, Sky will receive cash of £600 million on completion and further deferred and contingent consideration up to the value of £120 million. The total value of £800 million represents a multiple of approximately 15x EBITDA for the 12 months ended 30 June 2014. Sky will retain an equity stake of approximately 20 per cent in Sky Bet and ongoing board representation. As part of the transaction Sky has also entered into a long-term brand licence agreement with Sky Bet.
Sky Bet was formed in 2001 and has grown rapidly to become one of the leading operators in the UK’s online betting and gaming market, through its strong partnership with Sky Sports and its track record of technology and product innovation. Sky Bet was one of the first operators to recognise the potential of online and mobile platforms for betting and gaming, and today operates a range of sports, betting and gaming services.
The Sky Bet management team, under the leadership of Managing Director Richard Flint, has been instrumental to Sky Bet’s success. They will remain with the business under the new ownership structure with all Sky Bet’s employees moving across into the new entity. The business will remain headquartered in Leeds.
Jeremy Darroch, Group Chief Executive of Sky, said: “In the last ten years, we have successfully grown Sky Bet from a start-up to one of the leading online betting and gaming companies in the UK. This transaction will allow us to focus further on the substantial growth opportunities in our core international pay TV business while realising significant value for our shareholders.”
The transaction is subject to regulatory clearances in the UK and Ireland and is expected to close in the first quarter of 2015.
Goldman Sachs International is acting as exclusive financial adviser to Sky on the transaction.
Notes to Editors:
Sky will receive cash consideration of £600 million payable at completion (subject to certain adjustments customary for a transaction of this nature) and will retain an equity stake of approximately 20 per cent in Sky Bet. In addition, Sky is entitled to receive £70 million under the terms of a vendor loan and additional deferred and contingent value of up to £50 million, contingent on CVC achieving certain minimum return criteria on its investment in Sky Bet. The amounts outstanding under the vendor loan and payments to be made in accordance with the terms of the contingent value shares in Sky Bet become due upon an exit from Sky Bet by CVC, among other circumstances. The total value of the upfront cash, equity stake, vendor loan and contingent value shares is £800m.
Sky is Europe’s leading entertainment company. The group serves 20 million customers across five countries: Italy, Germany, Austria, the UK and Ireland. We offer the best and broadest range of content, deliver market-leading customer service and use innovative new technology to give customers a better TV experience, whenever and wherever they choose.Sky has annual revenues of over £11 billion and is Europe’s leading investor in television content with a combined programming budget of over £4.6 billion. The company employs 31,000 people and is listed on the London Stock Exchange (SKY).
About Sky Bet
Sky Bet was formed in 2001 and today operates five major online businesses, namely Sky Bet, its sports betting business; Sky Vegas & Sky Casino, its gaming businesses, Sky Poker, Sky Bingo and Oddschecker, the leading odds comparison site. Sky Bet, headquartered in Leeds, is led by Sky Bet Managing Director Richard Flint who, along with all of Sky Bet’s employees, will stay with the business.For the year ended 30 June 2014, Sky Bet generated net revenues of £182 million, EBIT of £50 million, EBITDA of £52 million and profit before tax of £50 million. As at 30 June 2014, Sky Bet had gross assets of £106 million. Sky Bet financials are adjusted for standalone costs.Sky Bet’s results will be continue to be included in Sky’s financial statements until completion of the transaction.
About CVC Capital Partners
CVC is one of the world’s leading private equity and investment advisory firms. Founded in 1981, CVC today has a network of more than 20 offices and over 300 employees throughout Europe, Asia and US. CVC manages funds on behalf of over 300 investors including pension funds, financial institutions, sovereign wealth funds and other investors. To date, CVC has secured commitments of US$71 billion and has completed over 300 investments in a wide range of industries and countries across the globe, with an aggregate enterprise purchase value of approximately US$120 billion. Today, CVC funds have stakes in more than 60 companies worldwide, employing around 400,000 people in numerous countries. Together, these companies have combined annual sales of approximately US$120 billion.CVC’s local knowledge, relevant sector expertise and extensive contacts underpin a 31 year proven track record of investment success. CVC has a strong track record of investing in the betting and gaming sector, including successful previous investments in William Hill and IG Group; and CVC is the controlling shareholder of the Formula One Group, an important content partner for Sky. For more information visit www.cvc.com
Goldman Sachs International, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting for Sky plc and no one else in connection with the transaction and will not be responsible to anyone other than Sky plc for providing the protections afforded to clients of Goldman Sachs International, or for giving advice in connection with the transaction or any matter referred to herein.
This news content was configured by WebWire editorial staff. Linking is permitted.
News Release Distribution and Press Release Distribution Services Provided by WebWire.