In a call with analysts following the announcement of Tabcorp's acquisition of BetMakers on Tuesday, the company's executives described the move as the "cheapest and most efficient" way to revamp Tabcorp's technology infrastructure. Tabcorp has acquired 100% of BetMakers at a price of AU$0.24 (US$0.17) per share, which values BetMakers at around $283 million, with an enterprise value close to $267 million.
Tabcorp estimates that the acquisition will lead to annual cost synergies of up to $30 million by the end of the second year. These savings are primarily attributed to technological efficiencies, such as integrating BetMakers’ advanced product offerings, streamlining data centers, consolidating contracts, and improving corporate functions.
During the analyst call, Tabcorp CEO Gillon McLachlan emphasized that the choice to partner with BetMakers instead of developing technology in-house was driven by the anticipated cost synergies. He described the acquisition as a quicker and more cost-effective solution compared to a complete overhaul of Tabcorp’s existing technology systems.
CTO Robert Fraser underscored the benefits of BetMakers’ cloud-native, asset-light technology platform, which not only operates profitably but also presents lower execution risks compared to internal development projects. He noted that Tabcorp has a plethora of legacy technology, featuring a mix of on-premises and cloud data center infrastructures, along with various third-party services. Fraser explained, "The cost synergies will be delivered with BetMakers much faster and cheaper than we would be able to do ourselves. This conclusion comes from detailed analysis of our alternative options."
CFO Mark Howell reiterated the acquisition’s appeal, stating it was "the cheapest and most efficient way home and also the lowest risk option we had to modernize the tech stack."
Tabcorp aims to combine BetMakers’ racing data within its Sky Racing media offerings as part of the deal, enhancing data analysis capabilities for international audiences. McLachlan stated, "Ultimately, we’re talking about a complete suite of vision, data, technology, and wagering services, distributed to every significant territory globally. BetMakers provides complementary assets with varying opportunities in different markets."
Fraser highlighted BetMakers' strengths in customer intelligence and data capabilities, noting the added value these assets bring to the table.
As for the integration process, executives indicated they would focus on retaining key personnel from BetMakers, while overseeing the establishment of a predominantly new internal tech leadership team at Tabcorp, which Fraser will lead. McLachlan expressed confidence about the transition, mentioning, "We’ve got a team with clear targets established, and a structure that should guide us effectively through this process. Some team members involved in this integration were deeply engaged during the demerger, providing insights into our existing systems."
He added that Tabcorp is eager to incorporate talent from BetMakers, especially those with experience in AI adoption. "They’ve proven their capabilities in digital transformation, and we will tap into that expertise. Their lean and efficient approach aligns with the culture we are fostering at Tabcorp," he remarked.
