The shares of William Hill (LSE: WMH) were flat at 445p during early London trade this morning after the betting firm announced a £20m deal to buy Australian online gambling outfit Tom Waterhouse.
William Hill, the UK’s largest bookmaker, will also assume £3m of Tom Waterhouse’s liabilities. On top of this, if the acquisition’s operating profits improve in the coming years, William Hill could pay out a further 70m Australian Dollars in add-ons, or roughly £40m.
This deal comes five months after William Hill announced the acquisition of Sportingbet’s business in Australia, which so far has struggled. William Hill’s latest results indicated that Sportingbet is paying a considerable premium to acquire new customers in the region, compared to William Hill’s UK operation.
William Hill chief executive Ralph Topping commented:
“We are pleased to have secured this acquisition. International expansion is a key part of our growth strategy and making Australia our second home is a priority. The Sportingbet acquisition gave us a strong and proven platform with an experienced management team. Acquiring tomwaterhouse.com gives us a rapidly growing business that appeals to a complementary customer base.”
With a market cap of £3.8bn, William Hill’s shares trade at 14 times their expected earnings, and offer a prospective dividend yield of 2.8%.
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> Mark does not own any share mentioned in this article.