Bookmaker Paddy Power Betfair plc (LON:PPB) is taking a punt on the online betting market in the Republic of Georgia with its latest acquisition.
The group has paid £101mln for a 51% stake in Adjarabet, the market leader in online betting in the regulated Georgian market and expects to buy the remaining 49% of Adjarbet’s shares after three years at a price equivalent to seven times Adjarbet’s 2021 underlying earnings (EBITDA).
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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 has an estimated 40% of the market in the republic.
In 2018, Adjarabet generated revenues of 215m Georgian Lari (GEL), which is equivalent to £64mln, and EBITDA of GEL68mln (£20mln).
"This bolt-on acquisition is in line with our strategy of establishing podium positions in attractive online markets,” said Peter Jackson, the chief executive of the Irish bookie.
“Adjarabet's leading brand presence and strong management team have 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," Jackson said.
Today's transaction sees @PPBetfair take a 51% stake in #Adjarabet for £101m, with the remainder available in 2021. The deal provides immediate scale in an attractive, regulated market, and the potential to combine a leading local brand with the Group's tech and sports capability pic.twitter.com/2V5jJ8R50x
— Paddy Power Betfair (@PPBetfair) February 1, 2019