Sporting Index, one of the world's biggest names in spread betting, has been sold to private equity business Duke Street Capital for £53 million.
Compton Hellyer, Sporting Index's chairman, announced the sale to investors and analysts on Tuesday.
The acquisition adds another gaming property to DSC's mix of equity, which already included Gala, the bingo group, and Leisure Link, a leisure machine company.
In his announcement, Hellyer said there would be no immediate changes in Sports Index's day-to-day operations. The staff and the brand name, he said, will remain intact.
Sporting Index, which has 12,000 customers, has grown to represent more than 50 percent of the spread betting market since it was founded in 1992. The U.K.-based company will be left in the hands of chief executive Richard Glynn, while DSC will be represented by its head of private equity, Peter Taylor, as a non-executive director on the board.
Hellyer will take up more of an ambassadorial role as the company's founder.
The timing of the sale comes as a bit of a surprise, considering its success in building a betting brand, but Hellyer said the opportunity to turn the company over to one owner made too much sense to pass up for him and the original group of investors.
"When I started the company 11 years ago, I asked 50 of my friends to back me and risk £1.25 million," he said. "During the course of the next 10 years we have also been very well supported by private investors, but it has been a cumbersome share wielding base, and therefore it's more appropriate and practical to have one owner rather than a myriad of owners."
Those original investors, along with the many individuals who have bankrolled the company over the last 10 years, will get a "nice profit" from the sale, according to Hellyer. Shareholders who have been investors from day one could make 10 times their money.
Glynn, who joined Sporting Index in April 2000 and was appointed CEO in January 2001, echoed Hellyer's views and believes the deal "represents a good result for our existing shareholders, our employees and customers."
Glynn said the sale will help Sporting Index maintain the expansion pace that was set over the last decade and give the company a great opportunity to further grow the spread betting marketplace.
Hellyer attributes much of Sporting Index's success to the popularity of European football and the ease in which spread betting can be adapted for the games. Forty percent of all bets taken by Sporting Index has been on football, Hellyer said, while 24 percent has been on racing.
Sporting Index was an attractive buy, Hellyer said, because the British government is beginning a long process of overhauling gambling laws, the result of which will be a more open industry for the private sector.
An immediate goal for the new Sporting Index will be boosting its customer base, and the company's betting site, www.sportingindex.com, will play an integral part in that process.
"We want to try and get more people involved in spread betting by lowering the risks and making it easier to understand," Hellyer explained. "The Internet site has done wonderfully well and offers the ability to attract international markets."