Desmond to sell Betdaq to Ladbrokes for €30m
Businessman Dermot Desmond’s deal to sell Betdaq to Ladbrokes will boost his stake in the London-listed bookie.
Ladbrokes said yesterday €15 million of the €30 million it is paying for Global Betting Exchange Alderney Ltd, which controls and operates the Dublin-based betting exchange, will be by way of shares. Along with this, the bookmaker will pay an earn-out based on the gross profits generated by the exchange between December 31st, 2012 and December 31st, 2016.
Mr Desmond already has a stake of about 2 per cent in Ladbrokes. The deal will see that move closer to 3 per cent.
The bookmaker has also agreed to buy 10 per cent of a TBH Guernsey (TBHG), which develops and provides the technology that drives the exchange, for €4 million, with an option to buy out the remaining shares at the end of 2016.
The technology company, TBHG, will continue to license and provide its systems to Betdaq.
Under the terms agreed yesterday, if Ladbrokes does not exercise its option to buy the remaining 90 per cent of TBHG by the end of 2016, it can sell its 10 per cent stake back to Mr Desmond’s organisation for €4 million.
Both GBWA and TBHG are part of the Global Betting Exchange (GBE) group of companies which was established by Mr Desmond in 1999.
Ladbrokes statement yesterday reveals Betdaq had profits after tax last year of €2.8 million and had assets of €35.4 million. The figures also showed it matches €75 million worth of bets every week.
This is the first time numbers detailing Betdaq’s performance have been published, as the exchange is owned and controlled through unlimited and offshore entities.
Betting exchanges operate by allowing customers to both bet on a particular outcome or offer odds against it. Betdaq is the second largest after Betfair and capable of supporting significantly higher betting volumes than are being transacted today, according to Ladbrokes,
Ladbrokes already uses Betdaq to hedge some of its own risks. Its chief executive, Richard Glynn, said the exchange would be a close strategic fit with the bookmaker’s business.