Despite the economic downturn, bookmaker William Hill believes it has been resilient to the problems and has now concluded a major deal with gaming software developer Playtech.
Hill is to merge its existing internet business with operations which have been acquired by Playtech. The outcome will be a new casino, poker and sports betting business, which will carry the brand William Hill Online.
The combination is effective by using Hill’s name and Playtech’s software abilities. Pro-forma net revenue of nearly £200m this year is expected from the deal. William Hill is to control 71 per cent of the company with Playtech holding the remainder with an option to increase this up to 32 per cent. At the same time Hill has an option to buy out Playtech’s shares in full after four and six years at a price to be pinpointed by an independent.
The Aim-listed Playtech is acquiring a number of online gaming businesses, principally from two groups, Uniplay and Six Digits Trading, for a total of £145m. Most of the shares in those companies have been held by a major Playtech shareholder, Teddy Sagi. These new businesses will go into the mix for the William Hill deal.
On news of the deal, the bookmaker’s shares rose 23p to 189p, with Playtech increasing by 14p to 380p. The news came alongside a positive trading statement from William Hill, showing that the gross win was up nine per cent in the quarter to October 14, 2008. In the year to date, the gross win is up five per cent. In its betting shops, the gross win was up 10 per cent and online gambling increased by 21 per cent.
Ralph Topping, CEO at William Hill, said that there had been “little impact” seen from the economic downturn. “I am not going to say that we are recession-proof, but we have shown great resilience.”
He said that the deal with Playtech would mean that William Hill could revitalise its casino and poker offerings with minimal cost. It was an area of weakness in the Hill portfolio - especially the sportsbook product - and Topping admitted that Playtech was “much, much better than us” in this area.
