Looking to expand into the lucrative and ever growing Australian gambling
market, the Irish gambling group, Paddy Power has announced an acquisition deal
with one of the largest gambling firms Down Under.
Paddy Power said that it had purchased 51% of the shares in
Australia's Sportsbet for a maximum layout amount of A$58 million.
According to the terms of the acquisition agreement, Paddy Power will pay
Sportsbet A$48.5 million in cash, plus another 100,000 Paddy Power shares to
Sportsbet shareholders.
The weakening economies in Ireland and the United Kingdom have caused Paddy
Power to look beyond its traditional borders and seek out foreign expansion.
The Chief Executive Officer of Paddy Power, Patrick Kennedy, commented on the
new deal and 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."
"This acquisition adds a different dimension to our business portfolio,"
continued Kennedy, "to which we can bring trading, risk management and marketing
expertise honed in Ireland and the UK to complement Sportsbets's existing skills
and experience."
Paddy Power's shares rose over 7% in Dublin after the news of its acquisition
of Sportsbet broke.
The latest financial statement issued by Paddy Power shows that the group
achieved a 1% rise in the amounts staked through its betting shops and 31%
through its internet and phone divisions.
"The Board is satisfied with progress and momentum in the year to date and
remains comfortable with the consensus market forecast for 2009 for its existing
businesses, subject as ever to the volatility that could arise from sporting
results," said the Chairman of Paddy Power, Nigel Northridge.
