BlueBet confirms Betr merger alongside A$14m in cost synergies

BlueBet has confirmed the firm is set to merge with fellow operator Betr in a move that management have claimed will create a “leading Australian online wagering company”.

The transaction has been in the offing since January and was all but confirmed yesterday, 10 April, after BlueBet requested a halt in trading of its shares.

The deal will see BlueBet acquire Betr via an asset purchase, and will issue Betr shareholders around 265.4 million fully paid ordinary shares, equating to around 56.9% of BlueBet’s stock.

BlueBet has also confirmed a fully underwritten A$20m (£10.4m) placement to fund transaction costs and operational strategy for the combined business moving forward.

The two-tranche placement will raise the eight-figure sum at a value of A$0.21 per share.

Of the A$20m, around A$12m will be used as a “migration/promotional allowance” which BlueBet said would be needed for targeted advertising, generosity schemes and reactivation campaigns.

Around A$4m has been pegged for one-off costs relating to synergies, namely, decommissioning Betr’s tech platform, redundancies and IT investments.

A further A$4m will be put towards the cost of the transaction, including stamp and other duties.

BlueBet has confirmed it has identified around A$14m in cost synergies, with A$11m of those ready to be acted up “immediately”.

The A$14m of annualised cost synergies are expected to be realised in full-year 2025.

The combined business will operate off of BlueBet’s proprietary technology stack, with management championing Betr’s strong customer base as a core reason behind the transaction.

As detailed by BlueBet, Betr boasts around 341,000 open customer accounts with approximately 112,000 active customers.

In comparison, BlueBet has an active customer base of just over 67,000, with the company noting the end result will be a “sustainable base of recreational customers with low customer crossover”.

BlueBet also further lifted the lid on Betr’s financial performance, with around A$80m in gross win and around A$50m in net win in fiscal H1 full-year 2024.

The combined group is expected to transition to a single brand following an internal review, with BlueBet adding advertising and marketing savings from that process will then be reinvested.

BlueBet added that the combined business would look to “further organic and inorganic growth with a focus on accretive M&A”.

Also on the horizon, BlueBet confirmed a strategic review of its US operations would be undertaken following the completion of the deal.

BlueBet is active in the US via its B2C operations in the guise of ClutchBet which is live in Iowa and Colorado. It also has a licence in Louisiana.

However, no further B2C market launches are planned, with the group noting the three existing states have a “clear path to profitability”.

On the B2B front, a maiden deal in Ohio should see revenue begin to pour in during full-year 2025.

On the personnel front, the combined business will be led by Betr boss Andrew Menz as CEO, while current BlueBet CEO Bill Richmond will serve as COO.

BlueBet CFO Darren Holley is earmarked to retain his role following the completion of the transaction.

Betr chair Matthew Tripp will also become the business’ chair, effective from 1 January 2025, with current BlueBet chair Michael Sullivan remaining as a non-executive director.

Ben Shaw and Tim Hughes have also been confirmed as non-executive directors, with a yet-to-be-agreed third board member set to be added “as soon as practicable”.

The deal is expected to complete on 1 July, subject to standard regulatory and closing conditions.

BlueBet’s Sullivan said the merger represents a “transformational moment” for the ASX-listed firm.

The chairman said: “[We are] bringing together our best-in-class technology platform with Betr’s large and high-quality customer base to create a national challenger in the online wagering market.

“The Betr team is fully aligned with this vision, and we are excited by the growth opportunities and synergies that will be unlocked through the proposed merger of our two businesses.”

Tripp added: “Today is a significant day for Betr and a major step towards achieving our ambition to be a tier-one wagering operator. The combination of our joint scale and BlueBet technology platform is extremely powerful.

“What excites me most is the deep experience and highly complementary skillsets of the combined team which sets us up well for the next phase of growth.”