Unibet Signs Agreement To Acquire Australian Bookmaker Betchoice For $20 Million

Unibet Group plc today announces that it has signed an agreement to acquire 100 per cent of Betchoice Corporation Pty Ltd, one of Australia’s leading independent corporate bookmakers online. Betchoice operates a range of sports and racing betting products in the Australian market through its web site www.betchoice.com
Betchoice was formed by a partnership between Sydney bookmakers Colin Tidy and Mark Morrissey in 2001, originally sole trading under Colin Tidy’s name. In October 2006 Betchoice was corporatised and a Northern Territory licence was obtained to allow it to offer a greater product range than it could from its original base in NSW.
Colin Tidy is a well known name in Australian bookmaking and racing circles and has had 39 years experience as an on-course NSW rails bookmaker. Colin is arguably the best known bookmaker operating in Australia today. His profile having blossomed not just through his popularity amongst punters and fellow bookmakers alike, but also due to his great success in the breeding industry through his highly successful sire Zedative.
Mark Morrissey has 30 years in the bookmaking industry and holds a Sydney metropolitan bookmakers license. Prior to forming Betchoice with Colin Tidy, Mark held high profile positions with such industry notables as Mark Read (Iasbet) and Bill Hurley.
The transaction, which is Unibet’s second in a regulated market in recent months:
Provides access to the fast growing Australian online market;
Represents a solid platform from which to invest further and gain market share;
Positions Unibet well for the anticipated opening of live betting products in Australia at some stage in the future;
Provides Unibet with horse racing capability which can be leveraged further across the group
Unibet Group Plc is a publicly listed company at the NASDAQ OMX Nordic Exchange in Stockholm, but has its registered offices in the European tax haven of Malta. Started in 1997, Unibet.com provides a primarily European facing platform for sports betting, casino, games and online poker to over 5.9 million customers in more than 150 countries.
According to its own website, “Unibet offers a comprehensive range of online gambling products, such as sports betting, live betting, casino, poker, lotteries, bingo and soft games through the Group’s web sites: unibet.com, unibet.it & maria.com.”
The initial acquisition price is AUD 20.0 million (GBP 13.6 million), on a cash free and debt free basis, payable in cash on closing. In addition, there is an earn-out for Mark Morrissey, founder, Chairman and 38% shareholder based on 5.5x 2014 EBITDA in Australia less the initial acquisition price who will remain with the business post completion. A further AUD 2.4 million in aggregate will be payable to certain other shareholders, if 2014 EBITDA in Australia exceeds AUD 4.4 million.
Completion of the transaction is subject to approval by the Northern Territory Racing Commission and is expected to take place before the end of the second quarter of 2012. Unibet intends to rebrand the platform from Betchoice to Unibet following a short transition period.
Over the next two years, Unibet will invest significantly in improving the Australian product portfolio and in marketing to establish the Unibet brand in the fast growing Australian market. Applying the wider sports product range and risk management techniques within Kambi, Unibet’s B2B Sportsbook division, to Betchoice will improve Betchoice’s offering and financial performance. Kambi will also benefit from integrating Betchoice’s racing product within its portfolio.
As a result of the initial strategic investments to support future growth, Unibet does not expect the acquisition to have a significant financial impact on Unibet’s reported profits for 2012. The acquisition is not expected to impact the proposed dividend for 2011 to be announced in connection with the 2011 year end report.
Betchoice currently employs around 35 people in Australia who will be integrated into the Unibet team. Betchoice operates under a Northern Territory sports bookmaking licence and has offices in Darwin and Sydney.
“This strategic acquisition gives Unibet immediate access to the regulated Australian market, which is currently open to sports betting and horse racing. We intend to rebrand the business quickly to Unibet. Betchoice already has a strong offering and market position in horse racing and through Kambi, Unibet has the opportunity to enhance the quality and performance of Betchoice’s sports betting offering and so to deliver revenue growth and margin improvements,” says Henrik Tjärnström, CEO Unibet.
“In addition to benefit from the already existing Australian product offering, the acquisition of Betchoice will provide Unibet with a platform to facilitate other gambling services and opportunities should market conditions continue to improve.”
Mark Morrissey, co-founder and Chairman of Betchoice says, “We are delighted to become part of the wider Unibet group. There is a substantial market opportunity in Australia and with Unibet’s expertise in marketing and risk management, together with its market-leading sports betting offering, I am confident that we can increase substantially our market share and establish Unibet as one of the leading brands in Australia.