Australian Sportsbet Acquired by Paddy Power

EUR101 million paid for the acquisition A novelty in the Australian online gambling market has hit the news this week, with the land and online betting group Paddy Power acquiring an Australian group Sportsbet. Prior to this, back in 2009, Paddy power already acquired a 51 percent interest in the group for Euro 27.2 million, and now it paid another EUR100.9 million to buy the rest of the shares. According to Paddy Power CEO Patrick Kennedy, who assessed Sportsbet as "a cracking business", his company's confidence that the new acquisition will be a profitable investment had been borne out "and then some." In addition, Kennedy stated that the organizations manage to exploit the best in each other, which further enables his company to “drive development and investment and secure full participation in the upside of the business.” He expressed belief that March 2011 will be the final date to complete the deal, with the consideration paid through EUR 83.8 million in cash from Paddy Power's existing cash reserves, and the issue of EUR14.1 million of new Paddy Power shares calculated by reference to a share price of EUR29.17 per share and the Australian dollar exchange rate immediately prior to completion; and the assumption of a EUR3 million obligation to “certain Sportsbet employees.” It was also stated that if Sportsbet's EBITDA in 2013 exceeds A$80 million, the top additional payment payable will amount to A$25 million, and that all Sportsbet shareholders will be paid a special dividend of EUR6.5 million before the completion.