The Stars Group has announced an agreement to acquire Sky Betting & Gaming (SkyBet) from CVC Capital and Sky plc, in a cash and stock transaction valued at $4.7 billion. The high-profile deal will result in the world’s largest publicly listed online gaming company.
SkyBet controversially ended its affiliate programme last September, as a result of mounting regulatory pressure, and at this stage there has been no indication that Stars Group will move to reinstate the programme.
It is thought that the closure of SkyBet’s costly affiliate programme helped increase the valuation of the company.
The acquisition will provide The Stars Group with multiple operational and financial benefits, including:
- Greater revenue diversification and significantly enhanced exposure to sports betting, the world’s largest and fastest growing online gaming segment, as the majority of SBG’s revenues are generated by sports betting.
- An increased presence in regulated markets, particularly within the United Kingdom, the world’s largest regulated online gaming market.
- The development of sports betting as a second low-cost customer acquisition channel, complementing The Stars Group’s core poker business and enabling more effective cross-sell to players across multiple verticals.
- Improved products and technology as a result of the addition of SBG’s innovative casino and sports book offerings, and portfolio of popular mobile apps.
- Identified cost synergies of at least $70 million per year.
“We are delighted to join forces with The Stars Group,” stated Richard Flint, SkyBet CEO.
“We have had a fantastic last few years and would like to thank CVC and Sky for supporting us in becoming a leading online operator in the UK. This transaction allows us to offer our best-in-class products to a truly global audience. We’re excited about our future together.”
Commenting on the sale, Pev Hooper, Partner at CVC Capital, added: “Richard and his team have done a fantastic job building Sky Betting & Gaming into one of the UK’s largest and fastest growing operators.
“We have thoroughly enjoyed working closely with the team and our partners at Sky. This combination with The Stars Group opens a new and exciting chapter for SBG to accelerate its international growth, and we look forward to continuing the journey as a shareholder in the combined group.”