Ladbrokes has agreed a deal to acquire Europe’s second-largest betting exchange, Betdaq.
The UK bookie will pay an initial €30m for Global Betting Exchange Alderney, the operator of the Dublin-based betting exchange business, and €4m for a 10% stake in Betdaq’s technology provider.
Ladbrokes said the bolt-on acquisition would “create the most comprehensive sports betting service in the market”; grow digital revenues; allow it to command a greater of customers’ betting wallet by negating the need for them to go elsewhere for an exchange product; and provide Ladbrokes with a lower-cost hedging option for sports betting.
Ladbrokes CEO Richard Glynn said Betdaq was a “well-regarded and well invested business and a close strategic fit for Ladbrokes”.
Betdaq claims to handle more than £75m of bets every week, but profits have remained elusive since its launch in 2000 as it has struggled to build sufficient liquidity in the wake of market leader Betfair. Its Global Betting Exchange parent company also operates a white-label sportsbook business which runs off Betdaq, which powers the betting offering of brands such as 32Red and 3D poker room PKR.
Glynn has been eager to do a deal to revive Ladbrokes’ online business since being appointed as CEO in April 2010. The company ended talks over a deal for 888 in April 2011 after failing to agree on price, while a £470m deal for Sportingbet foundered on regulatory concerns over the Turkish-language Superbahis business in October 2011, split off and sold to GVC later that month.
Ladbrokes also pledged in 2011 to spend £50m over two years on upgrading its online technology, aimed at revitalising the online business and bridging the gap to high street rivals William Hill and Paddy Power. However, the company has still yet to fully relaunch its much-vaunted new sportsbook platform, a factor which contributed to the company’s worst set of online results in a decade last June and sparked the departure of product director Richard Ames.
The retain and online bookmaker will publish its full-year results for 2012 on 21 February.
Article written by Stephen Carter
