Paddy Power Betfair has announced the acquisition of a 51 per cent controlling stake in Adjarabet, the market-leading online betting and gaming operator in the Georgian market, for an initial £101m.
The move secures a firm foothold in a fast-growing, regulated online market and enhances the diversification of Paddy Power Betfair’s European online business.
Paddy Power Betfair expects, through agreed option arrangements, to acquire the remaining 49 per cent after three years.
Adjarabet is licensed to offer a full suite of online betting and gaming products in Georgia including casino, sports, poker and peer-to-peer games, and holds an estimated 40 per cent share of total online revenues in the country.
A strong brand presence is driven in part by an exclusive long-term marketing relationship with Adjaranet, the Georgian media website. During 2017, the business launched in the developing regulated Armenian online market, claiming a 10 per cent share of that market by the end of last year.
In 2018, Adjarabet generated revenues of GEL215m (£64m) and EBITDA of GEL68m (£20m).
Following on from the initial cash consideration, a mechanism has been agreed, consisting of call and put options, enabling Paddy Power Betfair to acquire the remaining 49 per cent after three years at a valuation equivalent to seven times 2021 EBITDA.
Peter Jackson, Paddy Power Betfair’s chief executive, said: "This bolt-on acquisition is in line with our strategy of establishing podium positions in attractive online markets.
“Adjarabet's leading brand presence and strong management team has established it as the clear number one in the fast-growing, regulated online Georgian market. Together with our group's technology and sports capabilities, we are confident that Adjarabet will be strongly positioned to continue to build on this success.”
