Tabcorp's recent acquisition of BetMakers was described as the "cheapest and most efficient" option for overhauling its technology framework, according to the company's executives during a call with analysts following the announcement on Tuesday. The deal involves Tabcorp purchasing all shares of BetMakers at AU$0.24 (US$0.17) per share, resulting in a valuation of around $283 million for BetMakers and an enterprise value close to $267 million.
The acquisition is expected to yield annual cost synergies of up to $30 million by the end of the second year following the takeover. These savings will predominantly arise from technology integration, including the utilization of BetMakers’ advanced product suite, the consolidation of data centers, streamlining various contracts, and improving corporate and support functions.
CEO Gillon McLachlan emphasized that opting for BetMakers over developing in-house technology was primarily motivated by potential cost savings. He indicated that this acquisition represented a quicker, more cost-effective solution than an organic modernization of Tabcorp's existing legacy technology.
Chief Technology Officer Robert Fraser praised BetMakers’ cloud-native and asset-light technology platform, pointing out that it is not only profitable but also carries less risk compared to undertaking internal transformations. He acknowledged that Tabcorp has accumulated significant legacy technology, which consists of both on-premises and cloud infrastructure.
Fraser stated, "The cost synergies will be delivered with BetMakers much faster and cheaper than we would be able to do ourselves. That’s borne out of some detailed analysis of the alternative options as well." CFO Mark Howell reiterated that this approach was the cheapest, most efficient, and lowest risk option for modernizing the technology stack.
In conjunction with the acquisition, Tabcorp intends to integrate BetMakers’ technology and distribution channels into its operations, creating a comprehensive package that merges racing media, data, wagering technology, and tote services aimed at international markets. McLachlan noted that BetMakers' racing data will be included in Tabcorp's Sky Racing media coverage to enhance data analysis capabilities.
He said, “Ultimately, what we’re talking about is having a full suite of vision, data, technology, and wagering services, having them end-to-end and distributed to every significant territory in the world. BetMakers has complementary assets, and the timing and exact opportunity in each market will differ.” Fraser added that many of the capabilities Tabcorp values in BetMakers relate to customer intelligence and media content and experience.
Looking ahead, the executives confirmed their intention to retain key personnel from BetMakers during the integration process; however, the team managing Tabcorp's tech division will largely comprise new members, with Fraser taking the lead. McLachlan stated that the company is equipped with a clear team structure and established targets to guide the integration. He highlighted that those involved in the integration had significant experience from prior processes, giving them valuable insights into the systems involved.
Both McLachlan and Fraser expressed enthusiasm about welcoming the new talent from BetMakers, particularly those focused on AI and digital transformation. McLachlan remarked, “They’re proven in digital transformation, and we’ll harness that capability. Their focus on being lean and efficient and fast aligns with the culture that we are building at Tabcorp.”
