The U.K.'s Sky plc, the pay-TV giant 39%-owned by 21st Century Fox Inc. (FOX) , has agreed to sell 80% of its Sky Betting & Gaming business to CVC Capital Partners in a deal that values the online operation at £800 million ($1.25 billion).
CVC said on Thursday, Dec. 4, that it will pay 15 times Ebitda for the year ended June for its stake, a price that reflects "Sky Bet's record of strong growth and high cash generation." The price falls to about 12 times based on forecast Ebitda for the current fiscal year, a source said, noting that Sky Bet's revenue has been rising at between 20% and 30% a year.
Sky Bet will become the only gaming business in the buyout firm's portfolio, though it has previously owned betting shop chain William Hill plc and spread betting company IG Group, and last year made an unsolicited £913 million bid for Betfair plc.
"Sky Best is a highly cash generative business and combined with our experience it is a perfect fit," the source said.
The agreement is the culmination of a long period of discussions following an approach to Sky by CVC. In the final months of talks Sky was also negotiating its $13 billion purchase of Sky Italia Sarl and most of Sky Deutschland Holding AG from 21st Century Fox and minority shareholders in the German company. Sky completed those deals three weeks ago and changed its name from British Sky Broadcasting Group plc to reflect its new pan-European status.