Sports betting giant BetonSports has bought the leading Chinese-facing
sportsbook Easybets in a deal worth US$32.5m in the first stage of a
planned acquisition drive.
The initial payment is for US$15m, including US$10m in cash, with
Easybets owners entitled to 43.5% of annual profits over the next three
years providing profits exceed US$3m.
David Carruthers, chief executive of BetonSports, said it was the first of several potential acquisitions this year.
“This is the beginning of the beginning of our acquisitions, and our next target it is in our sights,” Carruthers said.
“We will have a very busy year,” he added.
Easybets has over 70,000 customers coming from China and a net profit
of US$3.2m for the year ending December 2004 from a turnover of US$255m.
Its chief executive Tim Lambe has been retained to lead expansion into
the Asian region, but Carruthers said it would not be run purely as a
separate operating company.
“This will most certainly not be a Sportingbet style acquisition, and
we will be going large on synergies and cross fertilising of ideas,” he
said.
“Easybets is very successful with its live webcam casino offering and I
would fully expect to integrate that product throughout the BetonSports
brand.”
BetonSports also released its annual results today, which confirmed the
shortfall in profits predicted in its trading update in November 2004.
Net pre-tax profit halved to 13.3m for the year ending 6 February 2005, compared to figures for the same period last year.
This was put down to a poor run of results in the NFL and a loss of key
advertising channels that meant it reduced its marketing spend to
$10.6m against a forecast of $21.0m.
But the firm said it has now revised its advertising strategies with a
stronger focus on the internet and performance had picked up towards
the close of the reporting period.
“It’s fair to say the results substantiated the presentation in
November when we announced the trading difficulties,” Carruthers said.
“But the results since then should underpin confidence in BetonSports
ability to pick itself up and continue with the growth pattern seen
previously, and key performance indicators are above target.”
egrmagazine.com
