Ladbrokes seal the deal with Desmond for purchase of betting exchange BetdaqJanuary 24th, 2013 / lee
Ladbrokes have made a big stride forward in their operations as they snapped up the purchase of Irish betting exchange Betdaq. The deal is reported to have been settled for around £25 and it didn’t take long from the first approach from Ladbrokes to get the deal done. The acquisition becomes the first made by Cheif Exceuvite Richard Glynn since taking over Ladbrokes back in 2010. The deal with Dermot Desmond, founder of Betdaq and also a 2% shareholders in Ladbrokes was completed on Thursday morning.
Ladbrokes had been eyeing up several new acquisitions since Richard Glynn took over three years ago, but the Chief Executive failed to pull the trigger on any of the prospective deals. While there was interest raised previously in taking over 888 and perhaps most notably Sportingbet (which was eventually purchased by William Hill after protracted talks) Glynn has finally settled his first deal.
Talks between Ladbrokes and Betdaq have actually been going on for over a year, but the initial point of interest was about technology. It was on around a month ago that Ladbrokes saw the opportunity to enter into a merger deal with Irish millionaire Dermot Desmond to purchase Betdaq. There has already been an existing relationship between the two companies, with the Betdaq betting exchange being used by Ladbrokes to hedge bets.
The question now is where Ladbrokes will go with the betting exchange business. Betfair have the lion’s share of the betting exchange online platform, where punters bid against one another instead of a traditional middleman bookmaker. Betfair is reported to be worth about 20 times in trade to that of Betdaq, so there will be a huge challenge for Ladbrokes to get their newly acquired betting exchange up to those levels. It is hoped by Ladbrokes though they will be able to at least retain some of their customers who also use Betfair.
Betdaq make after tax profit of around €2.8m to the end of December 2012, with their gross assets standing at a level of €35.4m. €15m of the €30m deal for Betdaq, will be in Ladbrokes shares, as well as them taking a 10 percent share in TBH, the technology provider to Betdaq.