# Paddy Power Betfair  Aquires Adjarabet, Georgian online market-leader

- Link: https://www.directorstalkinterviews.com/paddy-power-betfair-aquires-adjarabet-georgian-online-market-leader/412766109
- Published: 2019-02-01T07:35:42+00:00
- Author: Charlotte Edwards

**Paddy Power Betfair** (LON:PPB) today announced the acquisition of an initial 
51% controlling stake in Adjarabet1, the market leader in online betting and gaming
in the regulated Georgian market. The Group, through agreed option arrangements,
expects to acquire the remaining 49% after three years.

Adjarabet is licensed to offer a full suite of online betting and gaming products
in Georgia including casino, sports, poker and peer-to-peer games. It is the market
leader with an estimated 40%2 share of total online revenues. A key component of
this leadership position is the strength of the Adjarabet brand which has a c.86%
3 spontaneous brand awareness amongst the Georgian population, significantly higher
than competing brands. This brand presence is driven in part by the business’ exclusive
long-term marketing relationship with Adjaranet, the leading Georgian media website.
During 2017, the business launched in the developing regulated Armenian online market,
winning c.10%4 share of that market by the end of 2018.

In 2018, Adjarabet generated revenues of 215m Georgian Lari (GEL) (£64m) and EBITDA
of GEL68m (£20m)5. The initial cash consideration being paid by the Group for the
51% stake is £101m. A mechanism has also been agreed, consisting of call and put
options, which enables the Group to acquire the remaining 49% after three years 
at a valuation equivalent to 7 times 2021 EBITDA. The call/put option consideration
can be settled, at the Group’s election, in cash or shares.

This acquisition provides the Group with exposure to two attractive, fast-growing,
regulated markets. The online Georgian market is estimated to have grown at a CAGR
of 40% from 2016 to 2018 to an estimated £180m2 of gross gaming revenue with the
nascent Armenian market providing a further growth opportunity. We believe that 
the combination of the market-leading brand and local operational expertise with
Paddy Power Betfair’s technology and leading sports capabilities positions Adjarabet
very well to capitalise on this opportunity.

> **Peter Jackson, Paddy Power Betfair Chief Executive, commented:**
> “This bolt-on acquisition is in line with our strategy of establishing podium 
> positions in attractive online markets. Adjarabet’s leading brand presence and
> strong management team has established it as the clear number 1 in the fast-growing,
> regulated online Georgian market. Together with our Group’s technology and sports
> capabilities, we are confident that Adjarabet will be strongly positioned to continue
> to build on this success”.

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