Exclusive: Alizeti to raise £50m to fund full Tote buyout
Consortium aims to close second funding round at the end of August, according to investor documents seen by EGR
Alizeti is in the midst of a £50m funding round to pay for its 100% buyout of the UK Tote from Betfred, EGR can reveal.
According to investor documents obtained by EGR, the consortium is looking to close the latest round by the end of August and acquire the remaining 75% stake in the Tote in October.
Alizeti previously raised £55m in its first funding round before buying the 25% stake in the Tote back in May 2018.
It is thought that racing could walk away from its partnership with Alizeti if the consortium cannot complete the Tote acquisition within an allotted timeframe.
The 100% transaction would value the Tote at £115m, or 9.6x 2018 EV/EBITDA
In its pitch to investors, Alizeti said it was “ready to transform the Tote” as 100% owners, likening the racing pool to the London Stock Exchange which saw trading volumes multiply exponentially between 2001 and 2017.
Following a full takeover, Alizeti forcasted consolidated EBITDA of £20m in FY2021-22, £35m in the year after that and £50m in FY23/24.
The firm said the growth would be driven by the development of new digital products, and a ”global B2B opportunity” that could see liquidity from places like Hong Kong and China bet into UK pools
The document pointed to the launch of the so-called World Pool at Royal Ascot as a successful trial of the concept.
Royal Ascot 2019 saw the creation of the Tote World Pool, with liquidity from Hong Kong
Elsewhere, the pitch deck highlighted consumer research carried out by Alizeti, showing 41% of people didn’t use the Tote because of perceived bad value, with Alizeti pledging to launch a so-called Tote Guarantee, where B2C customers are guaranteed a dividend that matches or beats SP.
“This provides price certainty while keeping value upside,” Alizeti said.
The report also detailed brand research suggesting the Tote name had similar public recognition to Betfred and Paddy Power.
The raise is being overseen by Rothschild & CO.
Alizeti declined to comment.