Earlier this week, London-based telecommunications company Sky announced that a controlling stake in its online gambling division will be acquired by CVC Capital Partners. The world-famous private equity and investment advisory firm will pay the amount of £800 million or $1.25 billion for its new purchase.
Back in November, British Sky Broadcasting changed its name into Sky. The company pointed out its intention to undergo certain transformations that will turn it into a pan-European provider of premium television services.
Last month, it purchased an 87.45% controlling stake in Sky Deutschland. In addition to this, the provider acquired Sky Italia back in July.
Sky will receive a total of £600 million for the sale of its online gambling division, known as Sky Betting and Gaming. The company will also receive contingent payments totaling £120 million.
CVC, on the other hand, will acquire an 80% stake in the provider’s gambling business – the so-called Sky Bet. Sky will keep possession of a 20% stake, which is estimated to cost about £200 million. What is more, it will have its representatives on the Sky Bet board.
Jeremy Darroch, CEO of the Sky group, stated that the transaction will give the provider the chance to further develop itself in the area of paid television services. In addition to this, shareholders will most certainly receive major benefits.
The deal should be approved by the respective regulatory body and it is expected to be closed some time between January 1 and March 31, 2015.
Rob Lucas, one of CVC’s managers and head of its British investments division, commented on their future partnership with Sky as an excellent opportunity for a “strong platform”, that will enhance Sky Bet’s current success, to be created.
Sky Bet was launched back in 2001. Its users can place bets either on the Internet or through their mobile devices on various popular sports, such as soccer, cricket, horse racing, etc. And they can do this before the events or during them. The platform also offers a wide selection of casino-style games, poker, and bingo.
Apart from Sky Bet, CVC will also receive a controlling stake in Oddschecker, a website that offers constantly updated odds for sports betting.
Sky Bet marked an 18% increase in this fiscal year’s revenue which amounted to £183 million.
It was also announced that Richard Flint will remain managing director of Sky Bet even after the deal is finalized. What is more, the company will be headquartered in Leeds, England, just as it is now.
Goldman Sachs and the law firm Herbert Smith Freehills advised Sky, while OC&C Strategy Consultants and Freshfields Bruckhaus Deringer advised CVC throughout the negotiations.
