OpenBet in £208m management buyout
NDS sells provider to private equity firm and Inspired Gaming owners Vitruvian - OpenBet CEO leads buyout taking minority stake.
OpenBet has been acquired by private equity firm Vitruvian for £208m in a cash management buyout led by David Loveday, the software provider’s chief executive, the company has confirmed this morning.
Digital pay-TV technology supplier NDS, of which OpenBet is a subsidiary, announced it had signed an agreement to sell the software business to Vitruvian for £208m subject to certain regulatory approvals, a name familiar to the gaming industry following its acquisition of UK games machines business Inspired Gaming for £75m in May last year. The deal should be completed by the end of January, early February, Loveday told eGaming Review.
The buy-out is led by Loveday, whose management team will hold a minority stake. Upon completion of the deal, Vitruvian will hold a majority stake.
“This has been in the pipeline for around two months and we had a number of people who expressed an interest. We were a small subsidiary of a large company, now we’re a totally independent, standalone business,” he said. Loveday and the existing senior management team will continue in their roles. A statement said that NDS would use the proceeds for “general corporate purposes” but added no other detail.
“Vitruvian have a deep understanding of our business in both the online gaming and retail sectors,” Loveday added. “Their backing will enable OpenBet to continue to grow its business worldwide, with both existing customers and future opportunities.
“The business strategy is exactly as before but this now gives us a platform for future expansion and long-term investment. We have a specific plan and we’re going to continue to invest in core technology, expand our B2G deals, grow retail and online, grow our customer base and continue to make modest acquisitions,” he said.
Asked whether Vitruvian would look to exit the business in the next two to three years, Loveday said there was “no guarantee that any private equity company wouldn’t do that”.
“This is the biggest investment Vitruvian has made and we have to a) assume they’re in it for the long haul and b) like any private equity company they will look for an appropriate exit. This would either be in the form of an IPO or a trade sale and might happen in three years time, but then again it might not,” he added.
Loveday added that it was his “personal dream” to float OpenBet on the open market but that a merger with Vitruvian owned Inspired Gaming was “not on the radar at present”.
“From a personal perspective I would love to have the opportunity to float the business. This is more of a personal dream than something that might happen.”
OpenBet was founded in 1996 and changed its name from Orbis Technology last year. The company is the software supplier to some of the egaming industry’s largest operators including William Hill, Ladbrokes and Betfair.
Ian Riley, a managing partner of Vitruvian, added: “OpenBet is a high-growth technology business with a strong reputation, proven track record and impressive client portfolio. We are delighted to be backing David and his team and to be able to help support the continued development of the business.”