Ladbrokes confirmed two weeks ago it was in talks with the Dermot Desmond- founded firm over a possible takeover, in response to media speculation.
Ladbrokes confirmed the purchase yesterday; saying it should be earnings accretive this year and allow it to address “the full spectrum of the broader sports betting market and access a greater share of existing and future customers’ betting expenditure”.
It also noted that a large proportion of its customer base already uses betting exchanges as well.
Betdaq has an estimated 7% share of the online betting market in Ireland and Britain.
The deal will boost Ladbrokes’s flagging digital offering and enhance its services beyond the fixed-odds betting channel.
Chief executive, Richard Glynn, called Betdaq a “well-regarded and well-invested business”, which will prove “a close strategic fit” for Ladbrokes.
“Whilst the main focus of our digital growth strategy continues to progress well, this bolt-on acquisition provides us with an exciting opportunity to grow our share of wallet through the creation of a differentiated and comprehensive sports betting proposition for customers, and also supports our drive for improved liability management,” he said.
Technically, Ladbrokes is paying €30m for Betdaq’s exchange operator, GBEA; with half of that sum being settled via Ladbrokes shares. But it will also acquire a 10% stake in TBHG, the division of Betdaq which supplies the technology for the betting exchange to function.
Ladbrokes will also have an option to buy the remaining 90% of the latter business and a further option to sell back the 10% stake, for €4m, if it doesn’t exercise the first option.
As the total consideration for the GBEA acquisition is capped, the takeover will not require shareholder approval.