The investment in a big sports betting brand has been in trend off late with top most corporates shelling out big amount to buy major stakes in betting operators and Private equity group CVC Capital is one such venture fund who announced to have bought a considerable stake in German sports betting operator Tipico. Tipico has been passing through a potential cash crunch and to surge their cash balance they hired JP Morgan and Rothschild to look out for potential investors willing to partner with them. It took a good six months to find an interesting capital fund in CVC who also has similar stakes in other betting brands like UK sports betting company Sky Betting & Gaming. Although, actual details about the percent of stake and its value is not made public, but according to financial experts, Tipico valued itself to the tune of S$1.12 billion to $1.68 billion recently, hence it is assumed, amount for the deal should be enough to give them key stake in the German betting giant.
If we look at the financial background of Tipico it is one of the biggest sports betting brand in Germany founded in 2004 and has the sponsorship right of national football champions Bayern Munich. Moreover, they offer their services in both online as well in-store modes along with several online casinos with expected revenue to the tune of €500 million net. They earn major share of revenue through processed bets that made them one of the most strategically run betting house in the region and looking at this deal, industry experts are taking it a good bet for Luxembourg based private equity firm who is slowly but steadily spreading its arms across Europe.
Moreover, if we consider at its technical aspects, it would not be an easy going task for new owners since German “fuzzy” gambling laws are going to be a big problem for them and Government attitude is also not supportive for new gambling entrants. Anyways, if we look at CVC think tanks it is their first big move towards sports betting after they hired Goldman Sachs Group Inc.’s ex-Germany chief Alexander Dibelius last year who believes to be having vast experience in this sector. CVC issued a statement revealing the deal that says, “Tipico will be able to benefit from CVC’s extensive industry expertise, most notably from their experience as the majority owner of Sky Bet, a leading operator in the UK’s betting market. CVC has also previously had investments in the sports betting provider William Hill and the IG Group, a digital trading and betting platform.”