Toronto-listed The Stars Group has entered into an agreement to take over full ownership of Australian sports betting operator BetEasy.
The Stars Group has agreed with the minority shareholders of BetEasy to acquire the remaining 20 per cent stake in the business for AUD$151m, having acquired an 80 per cent majority stake through a series of transactions between February and April 2018.
As part of the agreement, The Stars Group has also agreed to pay $100m to settle the earn-out payment under the previous agreement to acquire the initial 80 per cent interest. The performance payment, which could have reached $232m, was subject to certain performance conditions primarily related to BetEasy's EBITDA.
From 1 January, BetEasy CEO Matt Tripp will provide ongoing leadership in his new role as non-executive president. Andrew Menz, currently BetEasy's director of strategy and regulatory affairs, will take over as CEO of the business, having previously served as legal and corporate affairs director of Betfair Australia.
“I'm delighted to reach this agreement for our BetEasy business,” said The Stars Group CEO Rafi Ashkenazi. “The launch of BetEasy through our acquisitions of CrownBet and William Hill Australia in 2018 created one of the leading operators in Australia and increased our exposure to a high-growth regulated market.
“Matt Tripp's entrepreneurial spirit and vision has guided BetEasy since he founded the business and we are glad he will oversee the transition as non-executive president.”
The Stars Group currently expects to complete the minority acquisition within 90 days following the earlier of either the issuance of The Stars Group's audited financial statements for the year ended 31 December 2020, or the completion of the previously announced merger with Flutter Entertainment.
The purchase price will be settled in cash unless it follows the completion of the combination, in which case Flutter may elect to settle in cash, Flutter shares or a combination of both.
The agreement also sees The Stars Group repay $56.9m of outstanding BetEasy minority shareholder loans.
“I'm pleased to see our long-term succession plan come to fruition,” said Tripp. “Andrew Menz brings deep commercial and regulatory experience which leaves BetEasy in a strong position to continue delivering profitable growth.
“I know that this business, which we founded back in 2013, is in very capable hands with a strong executive team and the backing of The Stars Group, who have been terrific partners and global leaders in this industry.”
Shares in The Stars Group Inc (TOR:TSGI) closed up 2.04 per cent at $32.48 per share in Toronto Monday, having hit a new 52-week high of $32.70 during trading.