On Tuesday, the Toronto-based TSG announced that it had reached a deal with BetEasy’s minority shareholders to acquire the remaining 20% of BetEasy that TSG didn’t already own for AU$151m (US$103.3m). TSG will pay a further AU$100m to settle performance payment obligations contained in TSG’s 2018 Beteasy acquisition, as well as repay AU$56.9m worth of BetEasy minority shareholders’ loans.
TSG said it expects the acquisition to conclude within 90 days of either (a) TSG issuing its FY2020 financial statements, or (b) the completion of TSG’s proposed merger with UK-listed gambling operator Flutter Entertainment (the former Paddy Power Betfair).
Should that merger go through, TSG cautions that the proposed all-cash deal for BetEasy could be settled via cash, Flutter shares or a combination of the two. Investors largely shrugged at Tuesday’s news, with TSG’s shares staying relatively flat by mid-day.
TSG CEO Rafi Ashkenazi expressed delight with Tuesday’s announcement, praising BetEasy founder Matthew Tripp’s “entrepreneurial spirit and vision.” Tripp has agreed to “oversee the transition as non-executive president,” a role Tripp will assume on January 1, 2020. Tripp’s former CEO position will be assumed by Andrew Menz, who previously served as BetEasy’s director of strategy & regulatory affairs.
Beteasy’s path to TSG’s total control is something of a microcosm of the incestuous consolidation frenzy that has gripped the sector in recent years. Beteasy began life in 2013 as a project for Tripp, who previously founded Aussie online betting operator Sportsbet (which he sold to Paddy Power Betfair).
In 2015, Tripp struck a joint venture with Aussie casino operator Crown Resorts and BetEasy was rebranded as Crownbet. Crownbet reverted to its BetEasy moniker in August 2018 after Paddy Power Betfair filed a legal challenge of Crownbet’s plan to rebrand as Sportingbet, a brand that Crownbet picked up from William Hill Australia, which had struggled for years to make its down-under operations profitable.