Ladbrokes buys Betdaq in €30m deal
Full details: -
Overview
Ladbrokes plc ("Ladbrokes") one of the world's leading betting and gaming companies, has today agreed to acquire Global Betting Exchange Alderney Limited ("GBEA"), the operator of the Betdaq exchange business, for an initial consideration of €30m on a cash free/debt free basis from TBH Limited ("TBH"). In addition, Ladbrokes has agreed to acquire from TBH a 10% stake in TBH Guernsey Limited ("TBHG"), the technology provider to GBEA, for €4m, with a call option to acquire the remaining shares in TBHG after four years. The transaction is subject to certain conditions, including certain regulatory approvals and confirmations. It is expected to complete in late February 2013.
Rationale
· Combines Ladbrokes' global brand and materially improved sportsbook with a high quality, scalable betting exchange to create the most comprehensive sports betting service in the market.
· Accelerates Ladbrokes' strategy to grow digital revenues through investment in proprietary technology and delivery of best of breed products, providing a differentiated experience to customers.
· Enables Ladbrokes to address the full spectrum of the broader sports betting market and access a greater share of existing and future customers' betting expenditure. A large proportion of Ladbrokes' customers already use a betting exchange.
· Further enhances Ladbrokes' liability management, with more flexible and lower cost hedging option
· The transaction is expected to be earnings accretive in 2013 1
Commenting on the acquisition, Richard Glynn, Ladbrokes' chief executive, said:
"The Betdaq exchange is a well-regarded and well invested business and a close strategic fit for Ladbrokes. Whilst the main focus of our digital growth strategy continues to progress well, this bolt on acquisition provides us with an exciting opportunity to grow our share of wallet through the creation of a differentiated and comprehensive sports betting proposition for customers and also supports our drive for improved liability management."
Operations and Product
Betdaq has been successfully developed using high quality technology by a dedicated team, with a long history in the exchange market. It is capable of supporting significantly higher betting volumes than are being transacted today. Ladbrokes will work with GBEA and TBHG to further enhance the competitiveness of the exchange, focussing initially on growing liquidity and event coverage as well as growing the range and depth of markets offered to both recreational and sophisticated customers.
GBEA will have a discrete management structure and its technology maintenance and development requirements will be wholly provided by TBHG. This will ensure continued focus on the further successful development of the exchange whilst importantly ensuring it does not impact on the delivery of IT projects within the Ladbrokes digital business.
Transaction structure
Betdaq comprises of two businesses: an exchange operator, GBEA and an exchange technology supplier TBHG.
The initial consideration for GBEA is €30m, with €15m of the consideration to be settled in Ladbrokes shares. GBEA generated profit after tax of €2.8m in the year ending 31 December 2012 on a pro forma basis and had gross assets of €35.4m.
In addition Ladbrokes will pay an earnout based upon the growth in GBEA's adjusted gross profits between the financial year ended 31 December 2012 and the financial year ended 31 December 2016.
Ladbrokes will also acquire 10% of the share capital in TBHG from TBH Limited for €4m, with an option to acquire the remaining 90% of TBHG once TBHG's results for the year ended 31 December 2016 have been finalised. Ladbrokes has an option to sell back its 10% interest in TBHG for €4m, if the call option is not exercised.
The total consideration for the acquisition of GBEA is capped and, as such, the transaction will not require shareholder approval.
Overview
Ladbrokes plc ("Ladbrokes") one of the world's leading betting and gaming companies, has today agreed to acquire Global Betting Exchange Alderney Limited ("GBEA"), the operator of the Betdaq exchange business, for an initial consideration of €30m on a cash free/debt free basis from TBH Limited ("TBH"). In addition, Ladbrokes has agreed to acquire from TBH a 10% stake in TBH Guernsey Limited ("TBHG"), the technology provider to GBEA, for €4m, with a call option to acquire the remaining shares in TBHG after four years. The transaction is subject to certain conditions, including certain regulatory approvals and confirmations. It is expected to complete in late February 2013.
Rationale
· Combines Ladbrokes' global brand and materially improved sportsbook with a high quality, scalable betting exchange to create the most comprehensive sports betting service in the market.
· Accelerates Ladbrokes' strategy to grow digital revenues through investment in proprietary technology and delivery of best of breed products, providing a differentiated experience to customers.
· Enables Ladbrokes to address the full spectrum of the broader sports betting market and access a greater share of existing and future customers' betting expenditure. A large proportion of Ladbrokes' customers already use a betting exchange.
· Further enhances Ladbrokes' liability management, with more flexible and lower cost hedging option
· The transaction is expected to be earnings accretive in 2013 1
Commenting on the acquisition, Richard Glynn, Ladbrokes' chief executive, said:
"The Betdaq exchange is a well-regarded and well invested business and a close strategic fit for Ladbrokes. Whilst the main focus of our digital growth strategy continues to progress well, this bolt on acquisition provides us with an exciting opportunity to grow our share of wallet through the creation of a differentiated and comprehensive sports betting proposition for customers and also supports our drive for improved liability management."
Operations and Product
Betdaq has been successfully developed using high quality technology by a dedicated team, with a long history in the exchange market. It is capable of supporting significantly higher betting volumes than are being transacted today. Ladbrokes will work with GBEA and TBHG to further enhance the competitiveness of the exchange, focussing initially on growing liquidity and event coverage as well as growing the range and depth of markets offered to both recreational and sophisticated customers.
GBEA will have a discrete management structure and its technology maintenance and development requirements will be wholly provided by TBHG. This will ensure continued focus on the further successful development of the exchange whilst importantly ensuring it does not impact on the delivery of IT projects within the Ladbrokes digital business.
Transaction structure
Betdaq comprises of two businesses: an exchange operator, GBEA and an exchange technology supplier TBHG.
The initial consideration for GBEA is €30m, with €15m of the consideration to be settled in Ladbrokes shares. GBEA generated profit after tax of €2.8m in the year ending 31 December 2012 on a pro forma basis and had gross assets of €35.4m.
In addition Ladbrokes will pay an earnout based upon the growth in GBEA's adjusted gross profits between the financial year ended 31 December 2012 and the financial year ended 31 December 2016.
Ladbrokes will also acquire 10% of the share capital in TBHG from TBH Limited for €4m, with an option to acquire the remaining 90% of TBHG once TBHG's results for the year ended 31 December 2016 have been finalised. Ladbrokes has an option to sell back its 10% interest in TBHG for €4m, if the call option is not exercised.
The total consideration for the acquisition of GBEA is capped and, as such, the transaction will not require shareholder approval.
Is this really good news? Does anybody think that Ladbrokes are going to keep letting traders win on their excahnge, especially if they are putting some liquidity into it themselves?
Ive been doing ok without getting spectacular results on Betdaq of late, though i fear im not going to be allowed to carry on trading in the way i do.
Ive been doing ok without getting spectacular results on Betdaq of late, though i fear im not going to be allowed to carry on trading in the way i do.
why would ladbrokes put in own liquidity???(maybe to start wiv to get it up and running) dont understand why they would lay a team at 2.2 on exchange when they can lay it at 2s in the shoposcar123 wrote:Is this really good news? Does anybody think that Ladbrokes are going to keep letting traders win on their excahnge, especially if they are putting some liquidity into it themselves?
Ive been doing ok without getting spectacular results on Betdaq of late, though i fear im not going to be allowed to carry on trading in the way i do.
-
giulio2010
- Posts: 962
- Joined: Sun Sep 12, 2010 9:11 am
I personally don't know if it's a good news or not!! It's difficult to have an opinion on something that did not happen yet. Perhaps ladbrokes will change their view regards winners, solely for business purposes..What I can tell for sure is that Betfair appoach to their customers seemd to have improved since last time I checked..ofc could be just a coincidence..oscar123 wrote:Is this really good news? Does anybody think that Ladbrokes are going to keep letting traders win on their excahnge, especially if they are putting some liquidity into it themselves?
Ive been doing ok without getting spectacular results on Betdaq of late, though i fear im not going to be allowed to carry on trading in the way i do.
Well yes, to get it up and running perhaps. Either way, they are now going to see it as their money, and they are not going to want a load of traders skimming their profits.
I find Ladbrokes one of the worst for limiting bets, i hope they dont run their exchange like they do their sportsbook.
I would imagine things would be ok for a while yet as they arent going to do themselves any favours if they start closing accounts straight away, though id fear for the future with them in charge.
I find Ladbrokes one of the worst for limiting bets, i hope they dont run their exchange like they do their sportsbook.
I would imagine things would be ok for a while yet as they arent going to do themselves any favours if they start closing accounts straight away, though id fear for the future with them in charge.
-
steven1976
- Posts: 1744
- Joined: Tue Jan 19, 2010 6:28 am
why would ladbrokes put in own liquidity???(maybe to start wiv to get it up and running) dont understand why they would lay a team at 2.2 on exchange when they can lay it at 2s in the shop[/quote]
They do mention that they would use the exchange for some of their liability management. Which would mean there would be more money put into BD which will then have the traders trying to get a piece of it.
"Further enhances Ladbrokes' liability management, with more flexible and lower cost hedging option"
Out of interest, how do they hedge their liability now if their book isnt filled properly?
They do mention that they would use the exchange for some of their liability management. Which would mean there would be more money put into BD which will then have the traders trying to get a piece of it.
"Further enhances Ladbrokes' liability management, with more flexible and lower cost hedging option"
Out of interest, how do they hedge their liability now if their book isnt filled properly?
Betdaq wrote:Dear Peter,
Ladbrokes plc, one of the world’s leading betting and gaming companies, has today (24th January 2013) agreed to acquire the BETDAQ exchange business. The transaction is subject to certain conditions and is expected to complete in late February 2013.
What does this mean for you, our valued members?
Whilst ensuring that the integrity of the exchange is fully protected, we believe that combining the strengths of Ladbrokes with the expertise of BETDAQ will have a hugely positive impact on the betting experience for our customers.
On completion, Ladbrokes will work with BETDAQ to further enhance the competitiveness of the exchange, focusing initially on growing liquidity and event coverage, as well as expanding the range and depth of markets offered.
How to access the website and how to contact us will stay the same, and we will continue to offer our great low commission rates and promotions. We will of course keep you informed of when any key developments or enhancements that may affect you are likely to happen.
Our ultimate ambition is to bring all the great elements of Ladbrokes and BETDAQ together and create an unrivalled betting experience for all our members.
The BETDAQ Team
Betfair will be worried, no doubt about that. If they are starting to engage with customers a little more, it will be interesting to see how far they go in an attempt to be more competitive. There's a chance that PC will become more of an issue now than ever before
Hi MCFC,mcfc1981 wrote:any coincidence ive had an email this week from my betfair account manager (didnt even know i had one) wanting to meet up in manchester next week to discuss projects they are working on
Sorry just going off topic..but intrigued!
You're the first person I know who has a Betfair Account Manager.(I'm not even sure Peter has one?)
How did you qualify for an Account Manager and how do they help you out?
Regards
Peter
I have one now and I'm aware of others are being contacted.
Betfair do have a major customer service problem which seems to extend right to the top, this is a real achilles heel as it will undermine their ability to keep customers loyal if a big competitor establishes itself. I wrote to the new CEO with some detail and asked for a meeting with him or one of his immediate managers. As with all previous letters it was completely ignored.
Betfair do have a major customer service problem which seems to extend right to the top, this is a real achilles heel as it will undermine their ability to keep customers loyal if a big competitor establishes itself. I wrote to the new CEO with some detail and asked for a meeting with him or one of his immediate managers. As with all previous letters it was completely ignored.