William Hill today completed its acquisition of software supplier Playtech’s 29% stake in its William Hill Online business for £424m.
CEO Ralph Topping said the board was pleased to be taking full ownership “of this attractive, high growth, high performing business.”
Playtech simultaneously issued a statement to the London market reiterating that the JV had delivered a cash return more than 3.5 times the original investment, excluding software royalties.
The software provider transferred approximately €177m- worth of affiliate, marketing and other assets to Hill’s in December 2008 for its share in the online JV, receiving €140m profit share on top of the £424m it was paid by Hill’s today.
William Hill undertook a £375m rights issue to fund the buyout, which Hill’s boss Topping said at the group’s full-year earnings call in March would also allow the business to perform bolt-on acquisitions, invest more than £20m cap ex a year in WHO and allow the latter’s online team to work more closely with the rest of William Hill.
The bookmaker confirmed last October that it was to start a formal valuation process of Playtech’s stake in its online arm, the companies eventually agreeing upon the £424m valuation announced to the London Stock Exchange on 1 March.
Playtech has yet to announce how it will use the close to half a billion in proceeds earned from the transaction. Founder and 49.66% shareholder Teddy Sagi could make more than £200m if investors back a full capital return of the WHO proceeds over investment in the business or further JVs.
While the JV was a financial success for both companies, delivering annual growth of more than 20% during the last three financial years, the relationship between the two partners grew increasingly strained during the course of the partnership, culminating in the mass walkout of nearly 600 WHO staff in October 2011, allegedly orchestrated by several disgruntled senior marketers and ex-Playtech employees with ties to Sagi.
Article written by Stephen Carter
