The Irish gambling giant Paddy Power has made a $200m bet on Australia!
The betting company has bought 51 percent of Sportsbet, one of Australia’s largest on-line and telephone betting agencies.
The deal, which will cost about $200m over three years, will initially cost Paddy Power €27.2m ($38m). It will also issue 100,000 Paddy Power shares to Sportsbet shareholders.
Paddy Power has been looking for overseas markets as gambling has been on the decrease in Ireland and Britain.
Patrick Kennedy, Paddy Power’s Chief Executive, said: “This business is an excellent fit with Paddy Power. Sportsbet has a strong, well-run business together with plenty of potential to build on its market position in Australia.
The acquisition adds a new dimension to our business portfolio to which we can bring trading, risk management and marketing expertise honed in Ireland and the U.K. to complement Sportsbet’s existing skills and experience.”
The company also released a trading update ahead of its Annual General Meeting, which was held Thursday, which said that it was satisfied with how it was performing so far this year.
Growth in its sports betting had increased significantly in recent months, the company said, thanks to its expanded web presence outside of Ireland.
In a statement, the company said: "Despite challenging economic conditions and adverse impacts on profits from less favorable sporting results… 2008 was another strong year for Paddy Power.
“Earnings per share grew by 10 percent to 140.5 cent on record pre-tax profits of €79m ($108m). Online operating profit increased by 34 percent and we added 23 new shops (betting parlors), including entry into the Northern Irish market.”
It also said that as of May 2009, it had had no debt and cash of €96m ($131m), “a position of excellent financial strength and flexibility in the current environment.”