William Hill acquires Australian online bookmaker Tom Waterhouse9th August 2013 6:51 am GMT
UK bookmaker William Hill has continued its expansion into the regulated Australian sports betting market with the acquisition of online bookmaker Tom Waterhouse in a deal worth up to AUD$110m (€74.7m).
William Hill said that the deal further reinforces its strategy of selective international expansion as the company develops its second ‘home’ market in Australia, following the recent acquisition of Sportingbet Australia.
William Hill chief executive Ralph Topping said: “We are pleased to have secured this acquisition. International expansion is a key part of our growth strategy and making Australia our second home is a priority.
“The Sportingbet acquisition gave us a strong and proven platform with an experienced management team. Acquiring Tomwaterhouse.com gives us a rapidly growing business that appeals to a complementary customer base.”
Established in 2010, Tomwaterhouse.com is a privately held online racing and sports betting business owned by managing director Tom Waterhouse and others. It has approximately 80 employees based in Sydney, Melbourne and Darwin
In its most recent results for the financial year ended June 30th, the company reported revenues of $28m, an increase of 250 per cent year on year.
“We are bringing together some of the best talent in the bookmaking industry into one formidable team,” continued Topping. “I'm impressed by Tom Waterhouse and his team, who are passionate and entrepreneurial. They've built a good business in a short period of time and have achieved strong growth momentum.”
William Hill will pay an upfront cash consideration of $34m for the business, together with the assumption of up to $6m of balance sheet liabilities. A potential additional earn-out on a sliding scale of up to $70m in cash is also payable, subject to Tomwaterhouse.com achieving incremental operating profit on a sliding scale between $10m and $30m in the year to December 31st 2015.
William Hill said that the acquisition offers the company additional scale in the regulated and growing Australian online betting market, as well as exclusive access to key media deals such as Channel 9 (NRL) and Channel 7 (Racing and AFL).
The company claimed that Tomwaterhouse.com has a complementary customer base with limited cross-over into William Hill Australia's existing customer base and with a strong focus on recreational customers, as well as significant online and mobile potential.
Tom Waterhouse, managing director of Tomwaterhouse.com, said: “I am excited by Tomwaterhouse.com becoming part of the William Hill family. Our customers will benefit from us being able to offer a more extensive product range than before and the kind of innovations that William Hill has already brought to the UK market.
“We will be able to use shared resources and get access to great technology that will help us continue to improve the customers' website and mobile experience. I look forward to becoming part of the William Hill Australia team to capitalise on this opportunity.”
While Tomwaterhouse.com is not currently profitable, William Hill expects to achieve substantial synergies as it supports the business' ongoing growth through its existing William Hill Australia operation.
The operating profit contribution from Tomwaterhouse.com is expected to be marginally negative this year, and marginally positive in 2014, enhancing underlying earnings in that year.
William Hill expects to incur approximately $7m of exceptional transaction and integration costs.
Completion of the acquisition is conditional on receiving approval from the Northern Territory Racing Commission.
At a meeting earlier this week, the Northern Territory Racing Commission approved the change of ownership structure, the appointment of new directors and a change of the management and control of the Sports Bookmaker Licence issued to Tom Waterhouse NT Pty Ltd and its transfer to William Hill Australian Pty Limited.
“This effectively transfers the online betting activities of Tomwaterhouse.com to the UK based William Hill group of companies,” said NTRC chairman Richard O’Sullivan in a statement this morning.