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Horse Racing Gaming: One of Britain's top gaming companies, Ladbrokes, launching in Australia

Ladbrokes plc (“Ladbrokes”) one of the world’s leading betting and gaming companies has agreed to acquire Gaming Investments Pty Ltd (“GIPL”), a fast growing online sports betting business in Australia. GIPL’s business includes Bookmaker.com.au Pty Ltd (“BPL”), operator of the online bookmaker Bookmaker.com.au and Panda Gaming Pty Ltd (“PGPL”), operator of an extensive racing and sports focused affiliate network in Australia.The acquisition, expected to complete this week, will see Ladbrokes acquire GIPL under its newly formed Australian arm ‘Ladbrokes Australia’ for an initial consideration of A$22.5 million, approximately £13 million plus an earnout payable at the end of 3 years which is based on the EBITDA for Ladbrokes Australia for the year ending 30 June 2016.
 
Key highlights
 
  • Extends global reach, providing a low cost entry into the regulated and growing Australian sports betting market.
  • Launched in February 2012, Bookmaker.com.au achieved circa A$400 million in amounts staked for the year to 30 June 2013. Led by Founder and CEO Dean Shannon, the business has a strong senior management team and skilled technology operation with extensive experience in the sector. As shareholders, the senior management team are highly incentivised to deliver future growth.
  • Includes ownership of an independently developed betting software platform created specifically for the Australian market with innovative product features, integrated with a tailored affiliate platform, a mobile platform and a number of mobile apps. 
  • The acquired assets include an extensive network of racing and sports betting affiliate sites in Australia which has helped drive efficient cost per acquisition.
  • A new website - Ladbrokes.com.au – which launches today, will be further developed utilising Ladbrokes extensive range of sports betting markets
  • Ladbrokes Australia is expected to make a small profit in the year ending 31 December 20141. 
Commenting on the acquisition, Richard Glynn, Ladbrokes’ Chief Executive Officer, said:“The acquisition of this fast growing business represents an excellent opportunity for Ladbrokes to establish a strong presence in Australia, in line with our strategy to extend geographic reach to key regulated markets. At launch Ladbrokes Australia will have a highly experienced management team who are strongly incentivised to achieve further customer and revenue growth over the coming years.
 
”Management and operational structureLadbrokes Australia will be overseen by Damian Cope, Ladbrokes International and Group Strategy Director, who reports to Chief Executive Richard Glynn. GIPL’s operations will continue to be based in Brisbane under the leadership of Founder and CEO Dean Shannon, a highly experienced online gaming entrepreneur. The senior management team will be retained and as shareholders are strongly incentivised to continue to drive growth in the business. Ladbrokes will be the primary brand for the business with existing brands continuing where appropriate. 
 
Positioning itself as a fun and modern betting brand, an active marketing campaign will be launched shortly focusing on the Spring Racing Carnival which encompasses a 65-day racing programme throughout the state of Victoria, culminating in the 2013 Melbourne Cup.
 
Transaction structure
 
Ladbrokes has agreed to acquire 100% of GIPL, which includes its bookmaking business BPL and its affiliate network PGPL, for an initial consideration of A$22.5 million (circa £13 million) payable in cash. In addition, there is an earn out payable in cash at the end of 3 years which is based on Ladbrokes Australia’s EBITDA for the 12 month period 1 July 2015 to 30 June 2016. GIPL’s EBITDA for the 12 months to 30 June 2013 showed a small loss. Ladbrokes is likely to incur a small exceptional charge during the current financial year in relation to the transaction.Footnotes1 Before accounting for amortisation and any possible exceptional items.