Stars Group Inc., the owner of PokerStars, has undergone a deal to buy Sky Betting & Gaming (SBG) for a whopping $4.7 billion. The move will result to the poker giant having a larger hold on sports betting, thus creating the biggest publicly listed online gambling company.
With its main headquarters in Toronto, the Stars Group shall pay in both cash and stock to the owners Sky Plc and CVC Capital Partners, according to their press release. The PokerStars operator figures it would get around 1/3 of its revenue from sports betting, the fastest-growing online gaming section, including the latest acquisitions in Australia.
CEO Rafi Ashkenazi called the acquisition ‘a landmark moment' for Stars Group, saying, "Sky Betting & Gaming's premier sports betting product is the ideal complement to our industry-leading poker platform.
The deal involves Stars Group paying $3.6 billion in cash and around 37.9 billion newly-issued common shares based on the closing price of its common stock on Friday April 20, 2018. Stars Group revealed it has obtained debt financing of around $6.9 billion which included $5.1 billion of first lien term loans, $1.4 billion of senior unsecured notes as well as a $400 million revolving credit facility. The resulting proceeds shall be utilized for the cash part of the deal and to refinance the company's existing first lien term loan as well as to repay SBG's outstanding debt.
Despite their past failure to acquire William Hill Plc (a rival of SBG), the Stars Group is now gaining a considerable foothold in the biggest regulated gaming market, the United Kingdom, and they shall definitely be enjoying numerous new signups from potential new customers for the group's online casino and poker offerings.
According to Ashkenazi, this acquisition also helps his strategy to reduce reliance on the instability of the poker business, which accounted for 2/3 of the group's revenue in 2017. He said that the Stars Group will become "the world's favorite iGaming destination".