Paddy Power Betfair has acquired Georgia’s largest online gambling operator to gain foothold in a new lucrative market
Gambling powerhouse Paddy Power Betfair announced today that it has acquired a controlling stake in Georgia’s largest online gambling operator, Adjarabet, in a deal worth £101 million (approx. $132.5 million).
The Dublin-headquartered company said that its latest purchase was part of its strategy to extend its footprint and cement its position into rapidly growing digital betting and gaming markets.
Under the terms of the deal, Paddy Power has acquired a 51% stake in Adjarabet for a purchase price of £101 million. The company also revealed that it has the option to buy the remaining 49% of the Georgian operator after three years at a price of seven times Adjarabet’s EBITDA for 2021.
Adjarabet is the leading operator in the lucrative Georgian online gambling market with an estimated 40% share of overall online revenue generated. The company also went live in the regulated market of Armenia in 2017 and claimed a 10% share of it last year. Adjarabet’s total 2018 revenue amounted to GEL215 million (approx. £64 million, $80.6 million).
According to Paddy Power’s statement announcing the deal, Armenia’s regulated online gambling market grew at a 40% rate in the period between 2016 and 2018 to around £180 million in revenue.
Focus on Fast-Growing Markets
Commenting on the acquisition of a controlling stake in Adjarabet, Paddy Power Betfair CEO Peter Jackson said today that the bolt-on deal came in line with the company’s strategy to establish “podium positions in attractive online markets.”
The executive went on to say that together with Paddy Power Betfair’s technology and sports capabilities, they are confident that Adjarabet will position itself to continue to build on the success.
Paddy Power was not the first major gambling company to spot the rapid growth of Georgia’s online gambling market and to move to expand there. Last spring, Isle of Man-headquartered gambling giant announced the acquisition of a 51% stake in local operator Crystalbet for a total consideration of €41.3 million and an option to buy the remaining 49% in 2021.
News about Paddy Power acquiring Adjarabet came days after a report by The Times claimed that the Dublin-headquartered gambling group secretly held talks late last year to merge with The Stars Group, parent company of PokerStars and Sky Betting & Gaming.
The two operators did not comment on the matter and The Times reported that tie-up talks were no longer taking place. A merger between these two would have created a gambling behemoth worth nearly $10 billion. However, The Times noted that any attempts for a deal of this scale would most certainly face regulatory scrutiny due to its impact on competition.
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