Sky sells stake in Sky Bet for £720m

British broadcasting giant Sky is to sell an 80% stake in Sky Betting and Gaming to private equity and investment firm CVC Capital Partners for a total of £720m.

The value of the firm is based on a 15X EBITDA multiple for the 12 months ended 30 June 2014 and will see CVC pay £600m in cash upon completion of the deal in Q1 2015 and a further £120m at a later date.

The deal values Sky Bet at a total of £800m and will see the operator’s management team, including managing director Richard Flint, who will assume the role of chief executive, remain in place at the firm and headquartered in its current Leeds-based office.

Sky will retain a 20% stake in the Alderney-licensed operator and maintain representation on the board, while also entering into a long-term brand licensing deal.

“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,” Jeremy Darroch, group chief executive of Sky, said.

“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,” he added.

Sky Bet was formed in 2001 and has since grown to become one of the leading UK-focused egaming operators, receiving particular acclaim for its innovation in mobile.

Last month the firm was the recipient of three awards at the eGaming Review Operator of the Year Awards including Mobile Operator of the Year and Mobile Sports Product.

The Leeds-based firm was one of the first operators to integrate Apple’s TouchID technology into a mobile betting application and has also recently begun trialling Apple’s iBeacon technology at two English Football League stadiums.

Last year it became the first mobile gambling operator to launch a seamless log in function to its portfolio of mobile apps, a capability a number of operators have since introduced to their own product suites.