WorldSpreads concludes Sale of Sports Spread Betting Division

Worldspreads’ announcement letter follows

WorldSpreads Group plc said that it has concluded a Sale and Purchase Agreement to sell its sports division to Fergus Rice, the head of the division. The unit comprised Sports Spread Betting (Ireland) Ltd., and Supreme Odds Ltd., the fixed odds betting division. The decision to exit this niche market was due to the Group’s shift of focus on growing more attractive financial spread betting business.

As the transaction was in the form of a management buyout, the company also saved some costs and realized some consideration from the business. This method also ensured that there would be no job losses, WorldSpreads noted.

Consideration for the deal was 250 thousand pounds in cash plus deferred consideration, also in cash, if certain earn out revenue milestones are met in each of the three years from April 1 2009.

Under the terms of the earn out, WorldSpreads will be entitled to up to GBP 1.5 million if the acquired business generates gross annual revenues of at least GBP 1.0 million in each year of the earn out period. The maximum earn out will be paid if the cumulative revenues of the acquired business meet or exceed GBP 4.5 million over the three year period.

Thoughts: So here we have a management buy-out team led by the head of the department, Fergus Rice. It appears that some 98 percent of Worldspreads’ revenues have been generated from the financial markets before the sale of the sports betting unit, with 75 percent of its overall business originating in Ireland and the UK so it does seem to make logical sense for WorldSpreads to dispose of the sports spread betting division.

Tags: Ireland, sports spread betting, worldspreads

This entry was posted on Saturday, April 18th, 2009 at 10:06 pm and is filed under Annoucements, Industry Happenings. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.