BlueBet boosts Australian wagering market share with acquisition of Queensland bookmaker TopSport

Australian online bookmaker BlueBet Holdings (ASX: BBT) has made a $15 million offer to acquire Queensland sports and betting company TopSport.

BlueBet will acquire a number of TopSport’s key assets including its customer database, brand, intellectual property and material contracts.

The company expects the acquisition to advance its goal of achieving a 10% share of Australia’s wagering market.

Cash-scrip payment

The bid consideration will be for an upfront $10m payment to co-founders Lloyd and Tristan Merlehan.

This payment will consist of $7m cash and $3m worth of new BlueBet scrip to be issued at the same price as the capital raising announced concurrent to the bid.

Deferred earn-out payments will also be made based on the net gaming revenue generated from TopSport customers in the first three years of BlueBet’s ownership.

If these do not reach at least $5m over the first two years, BlueBet will make up the difference in cash, putting the guaranteed total consideration at $15m.

Capital raising

BlueBet will fund the cash component of the upfront payment with a $15m capital raising from its institutional investors via the issue of approximately 44.1 million shares at $0.34 each.

The company will satisfy all other payments from its future cash reserves.

BlueBet anticipates the acquisition will be significantly accretive for  shareholders, promising more than 30% growth in earnings per share across the 2026 and 2027 financial years.

TopSport chief executive officer Tristan Merlehan will join BlueBet’s executive team as chief trading officer on completion of the deal.

Enhanced profitability

BlueBet chief executive officer Andrew Menz said the TopSport acquisition would materially enhance the company’s profitability and scale.

“Inorganic growth remains a key opportunity for us and we have a repeatable mergers and acquisitions model to drive shareholder value by further consolidating the Australian wagering market,” he said.

“Tristan Merlehan is one of this country’s most respected bookmakers and will help strengthen our market-leading risk and trading capability, driving margin improvement and sustainable profitability for shareholders.”

Suitable partner

Mr Merlehan said TopSport had identified BlueBet as the most suitable partner following a thorough process.

“BlueBet’s long-term record in customer migrations and scaling wagering businesses is unrivalled and I am pleased to play a key role in its bright future as we grow our share of the Australian market,” he said.

“I am very proud of what we have achieved at TopSport, and our customers will continue to receive the same levels of service going forward, together with the benefits of a significant uplift in their wagering experience.”

Betr merger

The TopSport acquisition follows BlueBet’s April merger with online bookmaker betr, which aimed to create a larger and more competitive online wagering service for the Australian market.

It resulted in a combined active customer base across both businesses of 179,000 and approximately 341,000 open accounts.

Betr’s customers migrated to BlueBet’s proprietary technology platform to drive organic and inorganic growth, retention and monetisation.