Sky has hit the jackpot and added £600 million to its coffers after selling an 80 percent stakes in its Sky Bet gambling business to private equity group CVC Capital Partners. The already lofty fee could rise to £720 million.
Under the terms of the deal, Sky retains a 20 percent interest in Sky Bet, which includes Sky Vegas, Sky Casino, Sky Bingo, Sky Poker, and betting odds comparison site Oddschecker, and has entered into a long-term brand licence agreement that allows CVC Capital Partners to continue using the Sky Bet name.
The Group Chief Executive of Sky Jeremy Darroch, said in a statement to the London Stock Exchange: “In the last ten years, we have successfully grown Sky Bet from a start-up to one of the leading online betting and gaming companies in the UK. This transaction will allow us to focus further on the substantial growth opportunities in our core international pay TV business while realising significant value for our shareholders.”
Sky Bet will continue to operate from its headquarters in Leeds, West Yorkshire under the leadership of Managing Director Richard Flint.
Managing Partner of CVC, Rob Lucas, said of the deal: “We are delighted to have agreed to acquire a controlling stake in Sky Bet. Richard Flint and his team have built a fantastic business, which is a leader in the fast growing mobile and online, betting and gaming markets. The partnership between CVC and Sky will provide a strong platform to support Sky Bet's ongoing success at this exciting point in its development.”
This is not CVC's first foray into the online gambling world. In May 2013, CVC made an approach for Betfair but nothing materialised from the negotiations. Later that year, CVC acquired a 75 percent stake in online payment processor Skrill for £511 million.