Sky Bet owner in running for ?1bn-plus Tipico acquisition
CVC Capital Partners one of three private equity firms believed to be involved in bidding process
Sky Betting & Gaming (SB&G) majority stakeholder CVC Capital Partners is “100% interested” in acquiring German sports betting firm Tipico in a deal thought to be worth in excess of ?1bn, sources close to the situation have told eGaming Review.
The private equity business, which last year completed a ?600m deal to buy 80% of SB&G, is expected to submit a formal bid by mid-April.
A market expert told EGR the buy-out could pave the way for SB&G sportsbook brand Sky Bet to enter the German market, and said the Leeds-based operator had recently written to German authorities to enquire about applying for a licence, while it has also joined the German Sports Betting Association.
CVC is one of three major private equity firms expected to bid for Tipico, as first reported by Reuters. US firm Centrebridge is said to be heading up a rival offer in partnership with German telecommunications giant Deutsche Telekom, while deep-pocketed Chinese company XIO Group is thought to be in contention.
Both CVC and Centrebridge/Deutsche Telekom could offer operational synergies through their existing assets – CVC with its Sky Bet technology and brand, and Deutsche Telekom through its Deutsche Sportwetten subsidiary, which runs the Tipp3 sportsbook, and rights to stream Bundesliga matches, basketball and ice hockey.
Another source close to the deal told EGR Tipico was looking for a partner to add value and enhance its opportunities for growth and had no need to sell without a good offer. He described the mooted ?1bn valuation of Tipico as “utterly wrong” and suggested a successful bid would have to go above and beyond that sum.
He said the price tag – which was based on comparisons with rival group GVC Holdings and potential regulatory uncertainty – underestimated Tipico’s online growth and the strength of its retail business.
Last year Tipico reportedly generated EBITDA of around ?110m. The firm also has a high-profile sponsorship agreement in place with Bayern Munich football club, topped the inaugural eGR Germany Power 10 list, and has sizable businesses in other markets such as Austria and Denmark.
The source added that the interested parties were also bullish on the German regulatory environment, believing that there were no regulatory limits to Tipico’s growth. German states are currently consulting on plans to increase the amount of sports betting licences in the country from 20 to 40.
CVC and Centrebridge were unavailable for comment at the time of publication while Deutsche Telekom declined to comment.