Swedish betting company, Unibet Group Plc, has agreed to pay £19 million in order to add Stan James to its portfolio. Stan James, which began life as a single betting shop in Wantage, Oxfordshire, grew to become of the biggest names in British bookmaking. The move from Unibet Group will see it acquire the online side of the business, as well as the full rights and ownership of the brand name.
The Stan James shops in the United Kingdom are not included in the deal and will continue to operate under the same name for a transitional period, with permission from Unibet. The move to buy Stan James is still subject to regulatory approvals, meaning that it’s unlikely to officially go through until the third-quarter of 2015. When it does go through, Unibet’s position in the UK gambling market will be significantly strengthened.
Why Unibet Wants Stan James
Whenever a deal such as this one goes through, the most obvious question to ask is why it is that the buying party has decided that it wants the company that it is paying millions of pounds for. In the case of Unibet Group Plc, the answer is fairly obvious: the company is attempting to make in-roads to the British gambling market and by buying one of the most trusted brands in the country they’ll get exactly that.
Stan James operates online sports betting, poker and a casino via its website, which Unibet will now get access to. The UK online market is believed to be worth around £2.7 billion, so it’s no surprise that Unibet wants a slice of the pie. It is one of the largest betting markets in the world, with its terms and conditions to companies proving too attractive to ignore, as proven by Stan James’ figures.
In the five month period up to the 31st of May, 2015, Stan James had a GWR of £10.5 million for the online side of its business. The EBITDA after the UK’s Point Of Consumption Tax was taken into account was £1.4 million, meaning that the acquisition is worth around six times the 2015 EBITDA when annualised. That’s before any future synergies that come about because of the transaction are even taken into account.
What It Means for Customers & Workers
Knowing why it is that Unibet Group Plc wants to buy Stan James’ online arm is all well and good, but there are employees working for Stan James and customers that have accounts with the company that will no doubt be wandering what happens next. In the case of the former, European Union rules on the acquisition of a business state that employees must be transferred to the company doing the taking over.
Stan James boasts around 150 employees at its Gibraltar offices, all of whom will now become employees of Unibet. When it comes to the customers, it is likely that their accounts will simply be migrated over to Unibet, allowing them to carry on betting as if nothing has happened. The £19 million deal includes an adjustment for customer liabilities that Unibet will take on when the takeover is completed.
What Is Being Said About the Deal
The Chief Executive Officer of Unibet Group, Henrik Tjärnström, is understandably upbeat about the move. His company will acquire roughly 84,000 active customers when the deal goes through, giving it access to a massive market. Little wonder then that Unibet has ‘long been looking’ at improving its position in the ‘UK online market’. Stan James’ strength in horse racing and football made it naturally appealing.
The reality for Unibet is that there are few companies of Stan James’ size ‘available for acquisition’, whilst the Swedish company’s recent move into the UK market means there’ll be little overlap in terms of what they both offer. Tjärnström said, “Over time we see a significant potential to increase the breadth of the Stan James product range, such as live streaming, casino and improving the mobile offering”.
As for Stan James, the Chief Executive Officer of Stan James Online, Denis Kelly, spoke of the company’s ‘delight’ at joining the Unibet family. He believes that Unibet’s ‘expertise in marketing and financial strength’ will combine well with Stan James’ ‘high quality sports and racing betting offering’ will allow the two companies to thrive and grow into a market that is ripe for the plucking.
Stan James Shops Will Continue – For Now
Perhaps one of the most significant parts of the deal is that Stan James’ betting shops on the UK high street will continue to operate and will do so under the brand name. Though Unibet Group Plc have agreed to pay £19 million in cash for the the ‘full rights and ownership of the brand’, there has been an agreement reached to allow Stan James shops to continue trading under the brand name ‘for a transitional period’.
Stan James, which was founded in 1973 by Steve Fisher and James Holder and took its name from Steve and his wife Anne’s names as well as James’ forename, started out with just one physical shop in the Oxfordshire village of Wantage. From there, it grew to own 70 or so shops around the country, thanks in no small part to the fact that the company bought shops from Pagebet when they went bankrupt in 2010.
Exactly what will happen to the shops remains to be seen, with the length of the contract between Stan James and Unibet over the user of the brand name unknown. It’s likely that the owners will simply re-brand the shops, but it’s not out of the question that one of the bigger high street brands might decide to make an offer for the shops and add them to their portfolio.