Sky has agreed to sell a controlling stake in its online betting and gaming business, Sky Bet, to CVC Capital Partners in a deal which values Sky Bet at £800 million.

“The sale crystallises value for Sky that has been created in Sky Bet, and enables the enlarged Sky to focus on the significant opportunity for growth in pay TV across the five markets in which it now operates,” the broadcaster said in a statement.

Sky will receive cash of £600 million on completion and further deferred and contingent consideration up to the value of £120 million.

Sky will retain an equity stake of approximately 20% in Sky Bet and ongoing board representation. As part of the transaction Sky has also entered into a long-term brand licence agreement with Sky Bet.

Sky Bet was formed in 2001 and has grown to become one of the leading operators in the UK’s online betting and gaming market, through its strong partnership with Sky Sports and its track record of technology and product innovation.

The Sky Bet management team, under the leadership of managing director Richard Flint, will remain with the business under the new ownership structure with all Sky Bet’s employees moving across into the new entity. The business will remain headquartered in Leeds.

Jeremy Darroch, Group Chief Executive of Sky, said: “In the last ten years, we have successfully grown Sky Bet from a start-up to one of the leading online betting and gaming companies in the UK. This transaction will allow us to focus further on the substantial growth opportunities in our core international pay TV business while realising significant value for our shareholders.”

The transaction is subject to regulatory clearances in the UK and Ireland and is expected to close in the first quarter of 2015.