Tabcorp will acquire B2B gaming technology provider BetMakers Technology Group for AU$267 million (US$189 million) under a Scheme of Arrangement. BetMakers shareholders will receive AU$0.24 per share in cash, or may take part of the consideration in Tabcorp shares at AU$1.00 each, capped at 25% of the total.
Tabcorp will issue up to 70.7 million new shares, equal to 3.1% of current capital. The fully diluted value of the transaction is put at AU$283 million. Completion depends on BetMakers shareholder and court approval, clearance from the ACCC and the relevant licensing authorities.
Tabcorp is targeting AU$30 million in annual synergies by the end of the second year of ownership. EPS accretion is expected from year two, and double-digit accretion from year three. CEO Gillon McLachlan said the purchase will speed up modernisation of the wagering infrastructure, widen the international business and add digital capability. BetMakers has been through a two-year transformation, so its platforms, data and B2B services sit alongside Tabcorp's rights, content and customer base.
It is the first deal for McLachlan, the former head of the Australian Football League, since he took the CEO job at Tabcorp. Talks opened in October and the transaction carried the internal name Project Wattle. The home market is unsettled: after higher weekly fees and lower commissions, some pubs and independent operators are leaving Tabcorp and dismantling its terminals. In February the company reported revenue of AU$1.35 billion, up 1% year on year, and EBITDA of AU$217.4 million, up 14.3%.
