William Hill in £241m swoop for Swedish online betting firm.
Bookmaker William Hill is to pay £241m for Sweden-based online betting firm Mr Green & Co.
William Hill, which employs 1,300 people in Leeds, said Mr Green operates in 13 markets under brands including Redbet and holds gambling licences in Denmark, Italy, Latvia, Malta, the UK and Ireland.
William Hill will offer £5.90 in cash per share for the Stockholm-listed company, a 48.5 per cent premium on its closing price on October 30.
The firm said the combination of William Hill and Mr Green will create a “strongly positioned combined business” with a panEuropean footprint in online betting and gaming markets alongside operations in the UK and the US.
William Hill said the takeover of Mr Green will increase its share of revenue and profits from online as well as from outside the UK, and reduce exposure to the UK market.
William Hill‘s chief executive, Philip Bowcock, said: “This proposed acquisition accelerates the diversification of William Hill – immediately making us a more digital and more international business.
“Mr Green will provide William Hill with an international
hub in Malta, with market entry expertise and strong growth momentum in a number of European countries.
“William Hill will move from a single brand to a suite of brands that can maximise growth opportunities moving forward in new and existing markets.”
It marks the latest expansion for the British firm, after it recently agreed a tie-up with US casino giant Eldorado in a bold move to tap into the recently liberalised American market.
British gambling groups have been increasingly turning to overseas expansion as a way to offset the recent blow from a UK Government crackdown on fixed-odds betting terminals.
Ladbrokes owner GVC recently announced a similar joint venture with Las Vegas-based casino group MGM.
Analyst Greg Johnson at Shore Capital said: “According to Bloomberg, Mr Green is forecast to generate revenue, EBITDA and EBIT in the year to December 2018 of £145m, £21m and £11m respectively building to £172m, £26m and £15m in 2019.
“The transaction represents an EBITDA multiple of under 10 times, which is likely to be sharply lower including synergies, which we estimate at around £5m. The deal is to be financed out of existing resources and would expected to be modestly earnings accretive of around 1p per share – offsetting the recently announced duty rise in the UK.
“The transaction supports the group’s strategy to digitise and internationalise, i.e. reduce its risk exposure to the UK, bringing both scale and a faster earnings growth profile, although we need to understand the added risk profile.”