The Stars Group has gone on record and announced its acquisition of the UK company Sky Betting & Gaming. The move will see the unison become the largest online gambling company as far as those that are publicly listed are concerned. Furthermore, it is set to highly boost the sports betting offerings of The Stars Group, as well as secure the combined company with stronger positions in multiple online gaming markets, where competition is already rife.
The deal that was agreed upon recently, with SkyBet being purchased for around $4.7 billion. Everything is aiming to be finalised by the end of the third quarter of 2018. Approval must be received from the Toronto Stock Exchange first (as The Stars Group is based in Canada), as well as gambling regulators and NASDAQ.
With this agreement coming into effect, The Stars Group has to pay both cash and stock to the SkyBet owners – the company CVC Capital Partners, as well as Sky Plc. With this in mind, the full value of the cash part of this deal comes to about £3.6 billion. Meanwhile, the leftover part of the total sum is to be paid out in newly-issued common shares, of which there will be about 37.9 million.
Of course, The Stars Group works as the owner of the world’s biggest online poker room – PokerStars. This was acquired by the Canadian company back in 2014, with sister brand, known as Full Tilt Poker, being bought at the same time. This was a record $4.9 billion takeover for The Stars Group, which was known as Amaya at that time.
SkyBet Details and Financial Information
As far as SkyBet is concerned, CVC Capital Partners owns 80% of it, while the remaining 20% is in the hands of the original owner, Sky Plc. It was also in 2014 that CVC purchased its share in the gambling operator – and, of course, a major share it was too, giving it the controlling stake in SkyBet. This deal went through at the time for about £720 million.
When it comes to the acquisition of SkyBet by The Stars Group, the latter company said that is has managed to obtain about $6.9 billion of debt financing. Therefore, it intends to utilise this money to be able to pay off the cash part of this deal, as well as repay the outstanding debt of SkyBet. Furthermore, the refinancing of the current first lien term loan will also take place with this money.
As spoken of before, this works as The Stars Group’s second acquisition deal that has a value of over $4 billion. At the time, former CEO David Baazov was very much admired for being able to secure a $1 billion investment as part of a deal with Blackstone – this exists as one of the biggest tight-fisted financial institutions. Baazov left the company in the middle of 2016. This came about when insider trading charges were brought against him – something which he is still battling against to this day.