Merger expected to be completed by July 1

Australia: BlueBet enters agreement to acquire wagering platform Betr

Michael Sullivan, Executive Chairman of BlueBet; and Matthew Tripp, Founder of Betr
Reading time 2:55 min

BlueBet Holdings has entered a binding asset sale agreement to acquire the Betr wagering business. BlueBet will issue approximately 265.4 million fully paid shares to Betr shareholders, which equates to around 56.9% of BlueBet’s current shares. The merger is expected to triple BlueBet's customers under 35 and provide Betr with better technology. 

On Wednesday, BlueBet requested a trading halt on the Australian Stock Exchange (ASX) amid talks of an acquisition. However, the deal remains subject to a series of closing conditions, including the support of BlueBet shareholders.

BlueBet has "unanimously" recommended shareholders vote in favor of the merger, saying it will create material value. If these conditions are met, BlueBet expects to complete the merger by July 1st.

Michael Sullivan, Executive Chairman of BlueBet, said: "This is a transformational moment for BlueBet. It brings together our best-in-class technology platform with Betr’s large and high-quality customer base to create a national challenger in the online wagering market."

"The Betr team is fully aligned with this vision. We are excited by the growth opportunities and synergies that will be unlocked through the proposed merger," Sullivan noted.

Michael Sullivan

For his part, Matthew Tripp, Founder of Betr, added: "Today is a significant day for Betr. It is a major step towards achieving our ambition to be a tier 1 wagering operator. The combination of our joint scale and the BlueBet technology platform is extremely powerful."

"What excites me most is the deep experience and highly complementary skillsets of the combined team which sets us up well for the next phase of growth," he further commented.

Matthew Tripp

In terms of management, the current Betr CEO will take on the same role at the larger business, with BlueBet CEO Bill Richmond becoming Chief Operating Officer. Darren Holley, currently Chief Financial Officer at BlueBet, will remain in this position after the merger.

As for the board, this will include BlueBet’s Sullivan as executive chairman and Tripp as a non-executive director. Ben Shaw and Tim Hughes will also be non-executive directors, with a fourth to join in due course. In the longer term, Tripp will assume the role of chairman on January 1, 2025. Sullivan will remain on the board as a non-executive director.

BlueBet will also launch an equity raising to secure AUD20 million ($13 million) in funding. This will help finance aspects of the merger including migration, marketing, and synergy realization costs. This placement will see shares offered at $0.21, with BlueBet to offer shares in two tranches. The first tranche covers 49.9 million new shares, 24.8% of its existing issued share capital, and the second 45.3 million shares, 22.5% of existing capital.

Betr's founder intends to participate and subscribe for approximately $2 million worth of new shares. Meanwhile, Sullivan of BlueBet will also take part and subscribe for $1 million of new shares. BlueBet expects to settle the last of the new shares in the placement by late May.

Having launched in October 2022, Betr has quickly grown and established itself within the Australian market. During the first half of the 2024 financial year, it posted an AUD10 million ($6.5 million) net win and $80 million gross win. 

BlueBet said the deal will benefit both businesses. Highlights include "significantly" enhanced scale and increased market share. BlueBet said the deal will allow it to migrate Betr players to its technology platform. 

Other benefits include operational efficiencies, with BlueBet expecting to realize between AUD11 million ($7.2 million) in annualized cost synergies in FY25. Also, transitioning the larger business to a single brand will allow for the reinvestment of advertising and marketing savings. The business is set to reach EBITDA profitability in the first half of FY25. It could also be EBITDA profitable in the same financial year.

While Australia will be the primary focus of the combined business, a strategic review of the US is planned post-completion. BlueBet says it will keep the market informed of any relevant developments on this front. However, BlueBet says a significant reduction in US expenditure can be expected. This comes with BlueBet’s global platform having been delivered, with no further B2C market launches planned.

BlueBet added that each of its existing B2C markets has a "clear" path to profitability. On this point, it also noted the commencement of B2B revenue in FY25, with the signing of its maiden Ohio sportsbook agreement.

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