Implications of William Hill and Playtech Deal
Published October 26, 2008 by OCR Editor
Henry Birch CEO of William Hill heads up bold initiative to acquire Playtech affiliates in bid to rule the European online gambling and sports betting roost.
William Hill feels confident their plans to acquire Playtech affiliates will yield positive returns. The bookmaker, boosted by their team Hull City's start to the Premier League, is eager to get software maker Playtech on board to continue positive growth in the industry.
The effect of the worldwide global meltdown has yet to arrive on William Hill's doorstep and they are doing all they can to maximize their earning potential with the new Playtech deal. The moves to acquire Playtech's customer service, marketing, gaming brands and websites operations bodes well for William Hill.
Licence agreements
William Hill signed several agreements with Playtech, one of
them a five-year software agreement for poker and casino gaming. The agreements
effectively push William Hill Online to the leader board of Europe's most profitable online sports/gambling
companies.
If the number-crunching adds up, William Hill Online will yield net revenues of £190 million before interest, tax and the amortisation of £75 million. Playtech does not walk away empty handed: they will receive 29%, possibly up to 32%, of William Hill Online but WH has the option of re-acquisition within 4-6 years. Additionally William Hill retains a 71% shareholding based on their contribution to EBITDA.
The figures
Given the global crisis, they're impressive: 9% increase in total gross wins. The sterling
performance of Hull City has helped William Hill to post such phenomenal
earnings. The economic slowdown is expected to hit in 2009, but until
then William Hill is looking to bolster their performance. Added to a 14% rise
in the share price of William Hill this year, the Playtech affiliates
acquisition certainly looks like the right move.
