Pay-TV wins as CVC buys Sky Bet controlling stake for £800MN
| 04 December 2014
As it continues to reshape the company to take best advantage of pay-TV opportunities, Sky is to sell a controlling stake in its Sky Bet business to funds advised by CVC Capital Partners.
SkylogoSky Bet was formed in 2001 and is one of the leading operators in the UK's online betting and gaming market, through its strong partnership with Sky Sports. The company was one of the first operators to recognise the potential of online and mobile platforms for betting and gaming, and today operates a range of sports, betting and gaming services.
The deal, said to 'crystallise value' for Sky values the online betting and gaming division £800 million with Sky receiving cash of £600 million on completion and further deferred and contingent consideration up to the value of £120 million. In addition, Sky is entitled to receive £70 million under the terms of a vendor loan and additional deferred and contingent value of up to £50 million, contingent on CVC achieving certain minimum return criteria on its investment in Sky Bet.
The funds will be used to fund expansion in pay-TV across the five markets in which Sky now operates. "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," commented Sky group chief executive Jeremy Darroch. "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."
Sky will retain an equity stake of approximately 20% in Sky Bet and ongoing board representation. The Sky Bet management team, under the leadership of MD 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 transaction is subject to regulatory clearances in the UK and Ireland and is expected to close in the first quarter of 2015.