BlueBet confirms “highly accretive” acquisition of TopSport
Operator has secured key TopSport assets, including intellectual property, as it looks to expand its presence in the Australian market via seven-figure deal
BlueBet has entered into a binding asset sale agreement to acquire TopSport for an upfront payment of A$10m (£5m) in a bid to boost market share in Australia.
BlueBet will acquire key TopSport assets such as its customer database, brand and intellectual property and material contracts from its parent company, Merlehan Booking Pty Ltd.
It is expected that by acquiring TopSport, BlueBet will be closer to taking 10% to 15% market share Down Under.
The fee will be made up of an upfront payment of A$10m, A$7m to be paid in cash, alongside A$3m in BlueBet scrip.
There will also be deferred earnout payments, up to A$5m, based on the amount of net gaming revenue generated from TopSport customers within the first three years following the acquisition.
To help fund the transaction, BlueBet has issued approximately 44.1 million shares at 34 cents each to raise A$15m in capital.
The deal is subject to obtaining regulatory approval from several bodies, with the transaction expected to close in April.
TopSport, based out of New South Wales, is run by directors Lloyd and Tristan Merlehan and has had an online site since the early 2000s.
As part of the deal, TopSport CEO Tristan Merlehan will become BlueBet’s chief trading office and join the operator’s executive team.
In the first half of financial year 2025, TopSport generated A$198m in turnover. The business also noted a gross win of A$14.4m and net win of A$11.8m. Net gaming revenue was posted as $5.2m.
During the first six months of the financial year, TopSport also had 11,300 active customers in a database of 90,900 open accounts, as per a BlueBet investor deck.
BlueBet added that during the reporting period, TopSport’s operating expenses sat at A$7.1m, with bosses noting that moving forwards, these costs will decline to A$1.7m.
“Therefore, TopSport customers will deliver a highly attractive incremental EBITDA margin even before further upside from the expected future uplift in net win margin,” the operator added.
It was also noted that 33% of TopSport’s last 12 months net win was derived from customers who were active with Betr, the brand that merged with BlueBet last summer.
Bosses said this pointed to a lower rate of cannibalisation, while TopSport customers skewed to sports betting as opposed to racing.
The transaction comes after BlueBet had halted trading of its shares on the ASX earlier this week in anticipation for the move.
BlueBet CEO, Andrew Menz, outlined the reasons behind the acquisition from the operator’s perspective.
He said: “The acquisition of TopSport materially enhances BlueBet’s profitability and scale, is highly accretive for our shareholders and brings us closer to our strategic target of 10%+ market share in Australia.
“Inorganic growth remains a key opportunity for BlueBet and we have a laser focus and a repeatable M&A model to drive shareholder value by further consolidating the Australian wagering market.
“This transaction is a blueprint for further M&A and delivers a high conversion of net gaming revenue to EBITDA as we leverage our previous investment in our proprietary technology, brand and best-in-class management team.”
Tristan Merlehan, TopSport CEO, added: “We conducted a thorough process to identify the best partner for TopSport and BlueBet was the clear choice.
“BlueBet’s recent and long-term record in successful customer migrations and scaling wagering businesses is unrivalled in this market, and I am pleased to play a key role in its bright future as we grow our share of the Australian wagering market.
“I am very proud of what we have achieved at TopSport and our customers will continue to receive the same levels of service going forward, together with the benefits of a significant uplift in their wagering experience.”