Ladbrokes, Britain’s biggest bookmaker, has taken the number one position in the Northern Ireland betting market after acquiring Eastwood Bookmakers for £117.5 million.
The sale of the Eastwood business, which is understood to have carried little or no debt on its balance sheet, crystallises a huge windfall for Barney Eastwood, the Irish boxing promoter, and his wife, Frances. Mr Eastwood, whose stable of fighters had five world champions, including Barry McGuigan, confirmed that the transaction, including goodwill and a leaseback of the freehold properties, was worth about £135 million to the Eastwood family.
For Ladbrokes, the deal brings 54 shops in a market where new licences are awarded only after a demand-based test, a method scrapped in other parts of the UK. Fewer than ten new licences have been awarded in the past five years in the province.
The company is paying more than £2 million a shop, roughly double the price of recent deals in England, although analysts said the restriction on new licences and underlying earnings per shop of about £200,000, compared with £100,000 in its other shops, meant the price looked fair.
Ladbrokes, which is the biggest bookmaker in the Irish Republic with 201 shops, entered Northern Ireland in 2006 through the purchase of 16 shops from Northwest Bookmakers and after the Eastwood deal it will have 23 per cent of the market. It plans to spend more than £4 million rebranding the Eastwood outlets under the Ladbrokes badge over the next 12-15 months.
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Joe Lewins, managing director of Ladbrokes in Ireland, said one of the reasons betting shops in Northern Ireland performed so well relative to the rest of the UK was the higher proportion of football betting, which produces a higher margin than horse racing.
Of the 54 shops it is buying, 30 are located in and around Belfast and the rest spread throughout the province. Mr Lewins said Ladbrokes would continue to seek acquisitions on both sides of the border.