The transaction does not include the UK shops business operated under the Stan James brand, which for a transitional period has been granted rights to the brand. Stan James is one of the most well respected online gambling operators in the locally regulated UK market offering online sports betting, casino and poker through its web site www.stanjames.com.
The transaction is subject to regulatory approvals and is expected to complete in the second half of the third quarter 2015. The transaction will significantly strengthen Unibet’s position in the large UK online market which is estimated to be worth around £2.7bn in 2015 according to H2 Gambling Capital and thus is one of the largest online markets globally that has already re-regulated with attractive terms and conditions. The acquisition price of £19m is payable fully in cash and will be adjusted for customer liabilities that Unibet will take over on completion.
Stan James has approximately 150 employees based in Gibraltar. In line with standard EU rules on the acquisition of a business, the employees will transfer their employment to Unibet.
In the five month period to 31 May 2015, the GWR of Stan James online business was £10.5m and the EBITDA, after charging UK point of consumption tax, was £1.4m. On an annualised basis the acquisition multiple is therefore around 6 times 2015 EBITDA, without taking account of any future synergies from the transaction. Such synergies can consist of more effective marketing and economies of scale associated with third-party procurement of products. For the second quarter of 2015, the number of quarterly active customers amounted to 84,266.
Unibet CEOHenrik Tjärnström said: “We have long been looking at strengthening our position in the UK online market. Stan James as an operator is one of the most well-respected in the UK market with particular strengths in horse-racing and other British sports. Stan James has had a long presence in the British market where there are few companies of this size available for acquisition. Since Unibet has only recently targeted the UK market there is little overlap between our respective businesses. Over time we see a significant potential to increase the breadth of the Stan James product range, such as live streaming, casino and improving the mobile offering,”
Denis Kelly, CEO of Stan James Online, said: “We are delighted to join the wider Unibet group. There is a substantial market opportunity in the UK following the re-regulation. Through the combination of Unibet’s expertise in marketing and financial strength, together with Stan James’ high quality sports and racing betting offering aimed at the UK market, I am confident that we can increase substantially the combined Group’s market share in the UK. I would also like to take this opportunity to thank the shareholders of Stan James for their strong support of the business.”