Paddy Power Betfair has expanded in Georgia, adding Adjarabet, and investing $115.6 million to buy out 51% of the company.
Paddy Power Betfair Expands in Georgia with Adjarabet
In a bid to diversify its assets, Paddy Power Betfair has just snapped up a 51% stake in Adjarabet, a Georgia-facing iGaming company. The transaction cost the company ca. $115.6 million, with the company continuing to spearhead its European portfolio.
Adjarabet holds 40% of the market in the country, making Paddy Power Betfair’s acquisition a valuable asset in the country. Similar to Paddy Power, Adjarabet owns a diverse portfolio of assets, allowing the company to cater to multiple types of gamers at once.
Adjarabet offers iGaming products, online poker, sports betting, and an exchange where gamers can bet against each other. The company is also present in neighbouring Armenia, charting Paddy Power’s future expansion in new markets.
Steady Revenue Windfall
Adjarabet boasted impressive revenue streams in 2018, having managed to amass nearly $90 million, making it a vibrant market. Given the results, Paddy Power Betfair can purchase the remaining stake in the company following a three-year grace period.
Commenting on the latest development around the company, Paddy Power Betfair CEO Peter Jackson had the following to say cited by the Financial Times:
This bolt-on acquisition is in line with our strategy of establishing podium positions in attractive online markets.
According to Mr. Jackson,” Adjarabet’s leading brand presence and strong management team” has made the company the fastest-growing operator in Georgia.
Treading Carefully in a Global Market
Paddy Power Betfair is diversifying its portfolio worldwide. While the United States has proven a tempting market, Mr. Jackson spoke in October, 2018, reminding executives and board members during an earnings call that the US is still a volatile market.
The company holds the popular Irish sports betting platform FanDuel, which it acquired in May, 2018 to coincide with the defeat of PASPA by New Jersey in the US Supreme Court.
My European 2019
Paddy Power Betfair is now trying to balance between a global portfolio of assets. Mr. Jackson spoke to the Independent, an Irish newspaper, explaining the company’s focus in Europe:
In Europe, our focus is on returning the Paddy Power brand to growth, and I’m encouraged by the initial benefits from our improved product offering following the migration to the new software platform.
Meanwhile, Paddy Power has been faced with trouble both online and offline, at home and abroad, with Sky Bet gathering stream over its rival. On home turf in the United Kingdom, the company has holding up well, but the fixed-odds betting terminals (FOBTs)’s maximum allowable stake is going to be reduced, paired with an increase in the gaming revenue, up to 21%.
While not ideal for Paddy Power as a business outfit, the FOBTs cut will benefit gamers who are prone to play recklessly.
A move in Georgia is not a bad way to add variety to its portfolio and try to develop the company’s footprint in fresh markets.