Poker Company Stars Group Buys Sky Betting for $4.7 Billion

Poker company Stars Group Inc. agreed to buy Sky Betting & Gaming in a deal valued at $4.7 billion, moving deeper into sports betting to create the biggest publicly listed online gambling company.

Toronto-based Stars Group will pay cash and stock to owners CVC Capital Partners and Sky Plc, it said Saturday in a statement. The operator of PokerStars estimates it would get about a third of its revenue from sports, the fastest-growing online gaming segment, including recent acquisitions in Australia.

“Sky Betting & Gaming’s premier sports betting product is the ideal complement to our industry-leading poker platform,” Chief Executive Officer Rafi Ashkenazi said in the statement, calling the acquisition “a landmark moment” for Stars Group.

The agreement calls on Stars Group to pay $3.6 billion and approximately 37.9 million newly issued common shares based on the closing price of its common stock on April 20. Stars Group said it has obtained debt financing of approximately $6.9 billion, including $5.1 billion of first lien term loans, $1.4 billion of senior unsecured notes and a $400 million revolving credit facility. The proceeds will be used for the cash portion of the deal, as well as to refinance the company’s existing first lien term loan and repay SBG’s outstanding debt, it said.

After its failed attempt to take control of Sky-rival William Hill Plc, Stars Group is gaining a significant foothold in the U.K. — the largest regulated gaming market — and a trove of potential new customers for its online casino and poker offerings. The acquisition also helps accelerate Ashkenazi’s strategy to decrease reliance on the unstable poker business, which accounted for two-thirds of revenue last year.

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