William Hill PLC has signed an agreement to acquire Brandywine Bookmaking LLC (Brandywine) for a total cost of approximately $15.7 million.
William Hill, the UK’s leading land-based bookmaker, offers sports-betting and gaming in 2,350 licensed betting offices it operates across the UK, which represent approximately 25 percent of the market. It also owns 71 percent of William Hill Online, an online betting and gaming business. William Hill was established in 1934 and has been listed on the London Stock Exchange since 2002. In April, William Hill also agreed to acquire American Wagering, Inc. (AWI) and the Cal Neva Sportsbook Division for approximately $39 million.
Brandywine, which employs approximately 90 people, operates 16 sportsbooks in Nevada under the Lucky’s brand and one in St. Kitts in the Caribbean. In addition, it is the exclusive odds maker for the Delaware State Sports Lottery, which it operates in partnership with Scientific Games. Scientific Games and Brandywine launched sports betting at the three Delaware casinos in September 2009 after winning a competitive procurement process.
Privately owned, Brandywine was licensed in Nevada in June 2008 and has rapidly established a strong operation. In 2010, its revenues were $7.7 million. William Hill is acquiring Brandywine for $14.25 million in cash before adjustments for working capital and is providing a $1.4 million convertible loan.
Ralph Topping, chief executive officer of William Hill, said: “We see the U.S. sportsbook industry as a great development opportunity for William Hill and are excited by the opportunity to invest in bringing together three highly respected leaders in Nevada and Delaware. Brandywine is a good strategic fit for AWI’s and Cal Neva’s sportsbook operations, and brings not only a well-regarded management team and Nevada operation but also an exclusive land-based sports-betting relationship with the Delaware State government. This business-to-government approach could prove an attractive model for other states looking to regulate land-based sports-betting. The combination of William Hill’s expertise and long track-record in the UK’s regulated market with these three leading businesses presents a good opportunity for William Hill to grow a leadership position in the U.S. sports-betting industry while investing in Nevada and Delaware.”
Joe Asher, president and CEO of Brandywine Bookmaking, stated, “This agreement with William Hill is a reflection of the three years of hard work by our team and the relationships we’ve built with our business partners. Together, we have accomplished a lot in a short period of time during a difficult economic climate and I’m proud to be associated with so many fine people. During the time we’ve been speaking with William Hill, I’ve met many of their executives during their numerous trips to Las Vegas. I feel good about the strategic and cultural fit between our organizations and look forward to working with the William Hill team in the future as we explore ways to grow the sports betting business in the U.S. It also will be nice to be on the same team with Vic Salerno and Jeff Siri and their colleagues at AWI and Cal Neva.”
William Hill and certain William Hill senior managers are in the process of applying for a non-restricted gaming licence from the Nevada Gaming Commission. This acquisition, and those of AWI and Cal Neva Sportsbook Division, will close only after successful completion of the licensing process, which is expected during 2012.
The acquisitions of Brandywine, AWI and Cal Neva Sports Book Division will be funded in cash from William Hill’s reserves and is expected to add to William Hill’s earnings per share from the first full year after completion (before transaction and integration costs and the amortization of intangible assets associated with these acquisitions).
William Hill acquires Brandywine Bookmaking
May 12, 2011