Sky Sells Stake in Sky Bet to CVC Capital Partners

By Razak Musah Baba 

LONDON-- Sky PLC is selling a controlling stake in gambling business Sky Bet to private-equity firm CVC Capital Partners for up to GBP720 million ($1.13 billion), to focus on its pay-television operations.

Sky said Thursday it would receive GBP600 million in cash on completion of the deal and potentially a further GBP120 million at a later date depending on certain conditions.

Sky said it would retain a 20% in Sky Bet and ongoing board representation. As part of the deal, which values Sky Bet at GBP800 million, Sky has also entered into a long-term brand license agreement with business.

"The total value of GBP800 million represents a multiple of 15x Ebitda for the 12 months ended June 30," the company added.

Sky Chief Executive Jeremy Darroch said "in the last ten years, we have successfully grown Sky Bet from a startup to one of the leading online betting and gaming companies in the U.K. This transaction will allow us to focus further on the substantial growth opportunities in our core international pay-TV business while realizing significant value for our shareholders."

The transaction is subject to regulatory clearances in the U.K. and Ireland and is expected to close in the first quarter of 2015.

Sky, which until recently was known as British Sky Broadcasting Group, counts 21st Century Fox as its largest shareholder with a 39.1% stake. Until June 2013, 21st Century Fox was part of the same company as News Corp, the owner of the The Wall Street Journal and Dow Jones Newswires.

Write to Razak Musah Baba at [e-mail]

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