The Canadian online gambling company The Stars Group is just about to get bigger as it announced on Saturday that it is going to buy its UK counterpart. Sky Betting & Gaming will be acquired by the giant Canadian company in a move that would create the largest publicly listed online gambling company. By doing so, Stars Group plans to expand its sports betting product and offer better positions in key online gambling markets despite the tough intense competitions.
Sky Betting and Gaming is going to be sold for £2.5 billion. Star Group Inc is the company behind PokerStars. And because of this deal, Star Group will be the largest publicly listed online gaming company today in the world.
Becoming the Biggest Player
SBG has a multi-million-pound sponsorship with the English Football League today. According to Star Group’s chief executive Rafi Ashkenazi, SBG would be able to complement PokerStars. This newest addition will be able to provide the growth that the group is looking for. He also described that the acquisition is a landmark moment for Stars Group.
He mentioned that “SBG operates one of the world’s fastest growing sportsbooks and is one of the United Kingdom’s leading gaming providers”. It is expected that the entire deal will be completed this year.
The completion of the transaction will be done by the third quarter of the year. It is also subject to the approval of the Toronto Stock Exchange, NASDAQ, and as well as other gambling regulators.
The terms of the contract include Star Group paying cash and stock to SkyBet owners CVC Capital Partners and Sky Plc. The cash portion of the deal amounts to around $3.6 billion. As for the remainder of the cash deal, it will be paid in shares that amount to $37.9 million.
A Landmark Deal for the Canadian Firm
PokerStars is the world’s largest poker operator. The Canadian company was able to acquire both PokerStars along with its sister company Tilt Poker in 2014 in a $4.9 billion deal. And since then, Star Group didn’t stop. Star Group, which was formerly known as Amaya then, led by Canadian David Baazov during that time, was able to grow the company. However, in summer of 2016, Baazov faced insider trading charges.
80% of SkyBet is owned by CVC Capital Partners. The remaining 20% is owned by Sky Plc. The decision by the Canadian company to acquire SkyBet is somewhat strategic. It came after there were media reports that SkyBet is going to emerge in the London Stock Exchange later this year.
SkyBet is the type of business that is going to get sold to a bigger company. And why so? SkyBet is a private company that would scrap IPO plans amid an unfavorable market condition. And instead, it would rather accept offers from cash-rich buyers.
As for the Canadian company, this is their second $4 billion-plus acquisition deal in just the past four years following the deals made on PokerStars and Full Tilt Poker back in 2014. However, it is possible that there are some perks that the company can get from acquiring SkyBet such as control on mobile gaming. 80% of SkyBet’s revenue came from mobile.