The Stars Group to increase CrownBet ownership, acquire William Hill Australia

6 March 2018

(PRESS RELEASE) -- The Stars Group Inc. announced today that it has entered into definitive agreements to increase its equity interest in CrownBet Holdings Pty Limited from 62% to 80% and for CrownBet to acquire William Hill Australia Holdings Pty Ltd., creating a leader in the regulated Australian online sports betting market. The aggregate purchase price for both transactions will be approximately $315 million, of which $234 million will be payable in cash for William Hill Australia and the remainder will be payable in approximately 3.1 million newly-issued common shares of The Stars Group for the increased equity interest in CrownBet. Unless otherwise noted, references to $ are to U.S. dollars and A$ are to Australian dollars.

"These acquisitions will further increase our exposure to the attractive regulated Australian sportsbook market and create a player of scale and clear rival to the top two operators there," said Rafi Ashkenazi, Chief Executive Officer of The Stars Group. "With complementary geographic profiles, we expect the combined business to leverage CrownBet's operating and proprietary technology platform and be well-positioned for growth and to navigate the ongoing regulatory and taxation changes in the Australian market."

In 2017, William Hill Australia generated unaudited annual revenues of A$190.5 million and unaudited annual EBITDA of A$49.6 million, while CrownBet generated unaudited annual revenues of approximately A$204 million and unaudited annual EBITDA of approximately A$7.9 million. The Stars Group currently anticipates the transactions will be accretive at a combined valuation of approximately 12.1 times unaudited 2017 EBITDA of A$57.5 million before anticipated synergies.

"I am excited to partner with The Stars Group," said Matthew Tripp, Chief Executive Officer of CrownBet. "We believe the acquisition of the William Hill Australia business gives us the scale and customers to become a leading force in the market and the tools we will need to prepare for potential positive regulatory movement in other jurisdictions."

William Hill's presence in the Australian sports betting market evolved through the 2013 acquisitions of Sportingbet and tomwaterhouse.com. At the time of its acquisition by William Hill, the Sportingbet business in Australia included both Centrebet and a sports betting business founded by Mr. Tripp and his family. Following the acquisitions, William Hill changed the brands to William Hill Australia and migrated all customers to its platform.

CrownBet's management team, including Mr. Tripp, will operate the combined business in Australia, which The Stars Group currently estimates will realize gross cost synergies of approximately A$50 million per year beginning in 2019 after a period of expected incremental integration and rebranding costs. The Stars Group anticipates such synergies to exceed the potential impact from expected point of consumption taxes in Australia. The management team of CrownBet will be entitled to an additional payment of up to approximately $182 million in 2020, subject to certain performance conditions and payable in cash and/or additional common shares at The Stars Group's discretion. The Stars Group will retain its right to appoint a majority of the directors on the board of directors of CrownBet.

To finance the cash portion of the purchase price for the transactions, The Stars Group obtained committed financing for a $325 million incremental first lien term loan. Of the common share portion, approximately 64% of the shares will be subject to transfer restrictions for a customary period. The transactions are conditional on obtaining approval by the Northern Territory Racing Commission and the Australian Foreign Investment Review Board, and The Stars Group's acquisition of the additional interest in CrownBet is conditional on the acquisition of William Hill Australia. The issuance of The Stars Group's common shares is also subject to approval by the Toronto Stock Exchange. The Stars Group currently expects the transactions to close in April 2018.

Macquarie Capital (USA) Inc. acted as sole financial advisor to The Stars Group, Deutsche Bank Securities Inc. and Macquarie Capital (USA) Inc. provided the committed debt financing, and PJT Partners LP acted as financial advisor to the Board of Directors of The Stars Group.

Related Links
The Stars Group Gaming Vendor Information
CrownBet Site Details
Stars Group Ownership Details
Stars Group Software Details
William Hill Ownership Details
CrownBet Ownership Details
Ranked Online Sportsbooks

Featured Vendors
Slot Machines Unlimited
Atrient
Slot Machines Unlimited
Exporter of IGT, Williams, AVP, Trimline, Aristocrat, Konami, Bally, & parts over 20 yrs experience
Atrient
Promotions, offers & drawings - how loyalty is rewarded.
Betson Imperial Parts & Service
Game King Slots
Betson Imperial Parts & Service
You one stop shop for all your gaming and OEM needs!
Game King Slots
New or reconditioned slot machines, parts & repair. Top manufacturers - WMS, IGT, Bally and more!
TribalNet
Payline Videos
TribalNet
19th Annual TribalNet Conference and Tradeshow Nov 5-8, 2018 Hard Rock Hotel and Casino Las Vegas
Payline Videos
Custom Video Solutions for Casinos & Gambling Websites!
Nathan Associates Inc.
Multi-Choice Cash (MCC)
Nathan Associates Inc.
One of the oldest and most respected economic consulting firms in the U.S.
Multi-Choice Cash (MCC)
Customized Cash Access Solutions for Gaming. Helping You Maximize Cash to the Casino Floor.
Casino Network
Vehicle Merchandising Systems
Casino Network
20+ years experience selling refurbished slot machines, parts & glass for all major brands
Vehicle Merchandising Systems
Innovative Vehicle Display Platforms for Casino Car Promotions
Gambling Invest
Mhetadata Marketing
Gambling Invest
Buy or Sell Premium Gambling Domains
Mhetadata Marketing
Marketing Automation automate your direct mail programs and save money doing it
Gaming Tickets, Inc.
Rymax Marketing Services, Inc.
Gaming Tickets, Inc.
35 years in the gaming industry - premium quality slot tickets, lottery tickets on time under budget
Rymax Marketing Services, Inc.
Leader in creating award winning player & employee loyalty programs & events proven to increase ROI
Regulatory Management Counselors, P.C.
Omnigo Software
Regulatory Management Counselors, P.C.
Over 35 years of experience serving the legal and regulatory needs of casino industry clients
Omnigo Software
Provides a fully integrated end-to-end Incident Reporting and Risk Management solution
Casino City Press
Zem Media
Casino City Press
A leading publisher and distributor of casino and gaming business data and market research reports.
Zem Media
Enhance the Guest Experience with Digital Signage Solutions featuring Easy-to-Use Content Management
Casino Schedule Ease
Casino Schedule Ease
Removing the chaos from casino staff scheduling one property at a time


Your Guide to 16,693 Gaming Industry Suppliers