As the group moved its Asian aspirations up a notch, Bet On Sport’s displays new multi-million dollar deals on its landscape this week.
Bet On Sports (BoS), the London listed company has announced its recent purchase of Hooball and 777ball, the China facing sportsbooks, thus effectively doubling its presence in the Asian market.
Sportsbook activity which is completely Internet based has its principal customer content in Zheziang and Guangdong provinces, Shanghai and Beijing, mainly centers on football and basketball. To deliver superior management control, improved processing channels, cost savings, product diversification across all of the groups Asian brands and additional key personnel skills, the business will be completely integrated into the existing Malaysian Easy Bets operating structure.
US$10 million in cash and the issue of 3,859,089 ordinary shares of 1p each in the capital of BoS, to be delivered on completion you read it here of the acquisition, which will satisfy the initial purchase price of US$22 million. Deferred consideration of up to US$16 million to be paid in cash has been agreed upon, depending on the profitability of the business in the year following completion. US$38 million is the maximum full purchase consideration for the business.
Revealing that the historic profit before tax to 31 December 2017 was US$3.6 million, a company spokesman established that the acquisitions are in profit. In respect of two sportsbook brands, the current rate of gross handle is approximately $120 million per annum, but that’s when you include exchange betting of $8 million per annum. Additionally, there is a new casino, with an initial gross handle of $5 million in that month, which began operations in March 2018.
The business had 28,274 sign ups, during the 15 months concluding with 31 March 2018, 40 percent of which were deposits of real money sign ups. Between January 2017 and March 2018, active clients remained comparatively stable at roughly 6,500 a month.
The earn out period agreed with Managing Director Tim Lambe, of Easy Bets, upon acquisition of Easy Bets in May 2017, because the new acquisitions are to be incorporated into the existing Easy Bets operation, has been extended from three to five years.
Adjustments have also been completed to the cost base and percentage entitlement to earnings above a bare minimum level in year 3 of the earn out which extend to years 4 and 5 such that US$40 million is the cap on total consideration for the Easy Bets acquisition at the present time, as compared with the original US$32.5 million.
David Carruthers, BoS CEO has said that he sees this acquisition is being not only a form of earnings enhancing. He says that BoS sees China as a market in which you must participate, and says that the company’s first mover advantage is significantly increased, with Hooball and 777ball consolidating their Easy Bets presence. As regards their United States facing business, Carruthers sees the diversification of revenue streams away from the United States as further mitigating the seasonality of their activity.
Carruthers believes that the aforementioned brands meet his company’s criteria for territorial expertise, proven profitability, robust processing channels and straightforward IT integration as combined with effectual risk management. Carruthers says that they strongly expect that the benefits of integration with Easy Bets in terms of marketing, cross-selling, cost savings and skill sets will very quickly become apparent. Furthermore, he thinks that coming immediately prior to a World Cup, it does not look like the most terrible of times to be acquiring such a robustly soccer-centric sportsbook.
Former CEO at Hooball Max Hsiun, who is now Easy Bets’ Business Development Manager believes that it is great to be a part of the BoS Asian plan and to team up with what he believes to be a quality brand like Easy Bets which possesses resources and a reputation. He says that this can only be good for the the Hooball business in terms of successful long-term future development.