William Hill has reached an agreement with Playtech to buy back Playtech’s share in the British online casino enterprise William Hill Online (WHO). The deal will see William Hill exercise their option of returning the 29 percent stake that Playtech originally owned.
The agreement puts the worth of Playtech’s 29 percent at around 11.5 times normalized 2012 EBITDA, which is about GBP 424 million. The buy-back option of the original agreement is in full compliance with the British gambling laws.
Playtech will still receive a proportion of the 2013 fiscal year profits from William Hill Online, before the deal is completed. The online gambling software provider has opted to receive the full sum in cash. William Hill has until the end of April 2013 to complete the transaction and pay Playtech.
Playtech received its 29 percent stake in WHO, when the online gambling enterprise was created and Playtech invested around EUR 177 million worth of assets into existing William Hill online operation.
Playtech statement in British gambling news had the following notes: “This transformational transaction created an innovative and exciting gaming business, which has grown very strongly since inception. William Hill Online is now one of the world’s leading online gaming operators, consistently returning annual double-digit growth. To 31 December 2012, Playtech’s total share of profits of William Hill Online (excluding software royalties) has been approximately Euro 140 million.”
Naturally, all software arrangements between Playtech and WHO will continue to stand after the transaction is completed.
Playtech also mentioned it will find the most appropriate use for the deal’s proceeds, following a broad review with a focus on shareholders’ feedback
Playtech’s stamen continues to mention: “The Board will, amongst other things, be assessing the potential for further value-enhancing acquisitions, joint ventures and partnerships, with a focus on regulated markets, together with the possibility of a return of capital to shareholders.”
Playtech CEO, Mor Weizer, commented: “William Hill Online has been an overwhelming success and has delivered a cash return to Playtech greater than 3.5 times its original investment, excluding software royalties in the four years since inception. The success demonstrates the potential to create value by combining a well-established brand with Playtech’s best of breed technologies, products and services.”
He went on to add: “I would like to thank the William Hill and William Hill Online management team for their efforts, and we look forward to our strong supplier relationship continuing.”