Australian racing and wagering giant Tabcorp will acquire B2B gaming technology firm BetMakers Technology Group for AU$267 million (US$189 million) by way of a Scheme of Arrangement, the two companies have announced.
Under the deal, made public on Monday, Tabcorp will acquire 100% of the issues shares of BetMakers for a cash consideration of AU$0.24 per share, with BetMakers shareholders able to elect to receive a portion of their consideration in newly issued Tabcorp shares in lieu of cash, which will be capped at no more than 25% of the total transaction consideration. The share offer will price the new Tabcorp shares at AU$1.00 per share and the maximum number of Tabcorp shares that can be issued as a result of the transaction is 70.7 million or 3.1% of Tabcorp shares on issue.
Tabcorp added that the cash consideration of AU$0.24 per share implies an equity value for BetMakers of approximately AU$283 million (US$200 million) on a fully diluted basis and an enterprise value of approximately AU$267 million.
Completion of the transaction remains subject to approvals from BetMakers shareholders and the court, clearance from the Australian Competition and Consumer Commission (ACCC), consents from gaming and racing authorities and other conditions.
Explaining the rationale behind the move, Tabcorp said the transaction would accelerate the delivery of its future strategy by modernizing the company’s wagering technology stack, leveraging the successful tech transformation of BetMakers over the past two years; delivering greater scale, diversification and growth potential to Tabcorp’s existing international business; and providing increased capability with proven digital transformation experience to ensure a more efficient operating model.
The company explained that it is targeting a run-rate of AU$30 million in cost synergies by the end of year two of ownership, adding that the acquisition is expected to be earnings per share (EPS) accretive from year two and double-digit EPS accretive from year three.
“The acquisition of BetMakers will accelerate our strategy across multiple areas,” said Tabcorp Managing Director and CEO, Gillon McLachlan.
“BetMakers has undergone a significant transformation over the past two years and built impressive wagering technology and a talented team. Accessing those advantages will uplift our own tech capability and fast track our product ambitions, particularly for our unique media and tote offering.
“Combining BetMakers’ business with our rights, content and customer relationships creates a differentiated offering that will unlock growth and deliver attractive financial returns. Tabcorp is midway through its strategic transformation, with strong foundations established, and this acquisition provides us with an excellent opportunity to accelerate our ambitions.”
BetMakers CEO Jake Henson added, “Having spent time with the Tabcorp team, it is clear we share a common purpose: to build a market-leading global wagering and media business. Bringing together Tabcorp’s rights, content and relationships with BetMakers’ platforms, data and B2B wagering services will create a more complete and compelling global offering for our customers, and an exciting future for our people.”
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