William Hill offloads Australian business to CrownBet for £169m
Hills cites regulatory pressures as it sells its Australia-facing arm to The Stars Group-owned company for an equity value of £176m
William Hill has agreed to sell its Australia-facing business to CrownBet for an enterprise value of AU$300m (£169m), bringing to an end the UK bookmaker’s five-year venture Down Under.
The operator this morning confirmed the sale of William Hill Australia to CrownBet for an equity value of $313.7m (£176m), ending weeks of speculation after the business was placed under strategic review in January.
Crownbet beat out stiff competition from Paddy Power Betfair, as well as bids from bet365 and Ladbrokes.
The deal comes just days after PokerStars-owner The Stars Group acquired a 62% stake in CrownBet for approximately £84m, with the deal for Hills giving Stars majority control over businesses with c. 20% market share of the Australian online market, according to Regulus Partners.
William Hill today said the sale was made in response to ongoing regulatory pressures in Australia, including a credit betting ban and the likely introduction of a Point of Consumption tax in a number of states.
“We are pleased to announce the sale of William Hill Australia to CrownBet,” Philip Bowcock, William Hill’s chief executive officer, said.
He added: “The disposal follows a strategic review of the Business, launched in January after its profitability came under increased pressure due to the recent credit betting ban and the likely introduction of a Point of Consumption tax.
“The disposal will allow William Hill to focus on continuing to grow our UK Online and US businesses, particularly as we prepare for the decision on the PASPA appeal due in 2018.”
Tom Waterhouse has been CEO of William Hill Australia since 2014
In the year ended 26 December 2017, William Hill Australia recorded revenues of $201m (£113m) and EBITDA of $47m (£26m), with gross assets of approximately £133m.
William Hill made its first major splash in the Australian wagering market back in 2013 when it acquired Sportingbet’s Australia business for £459.4m, before later adding Centrebet and tomwaterhouse.com to the business.
Tom Waterhouse became CEO of William Hill Australia in 2014, and according to Australian news outlets, will retain the rights to the tomwaterhouse.com brand, although the deal may include a non-compete clause.
For Stars, the the acquisition was expected, with the multiple paid for Crownbet seen as too big for the business in its current state. However, by combining the two businesses Stars will benefit from scale and operational synergies.
Regulus Partners estimated Stars now controls around 20% of the Australian betting market, behind Tabcorp/Tatts at 35% and Paddy Power Betfair (Sportsbet) at circa 25%.
Regulus added: “Individually, the businesses lack scale, with CrownBet also lacking a track record of profitability while William Hill lacked topline momentum and operational capability. The combination fixes some of this structurally, while CrownBet’s management team and platform is proven.
“The extent to which this is enough to deliver sustained double-digit topline momentum and attractive margins in a tightening regulatory-fiscal environment remains to be seen, but the sum certainly has a lot more chance than the parts.”