Paddy extends reach as it takes control of Australia's Sportsbet

Irish bookmakers Paddy Power will buy an outstanding 39 per cent stake in Australia's Sportsbet for 101m euros (£85.6m), giving it full control of the group and strengthening its position beyond Europe.

Paddy Power said yesterday the acquisition, which will be largely funded from its own cash reserves, would provide a springboard for expansion Down Under.

"It gives us the ability to develop further in Australia. For as long as we owned 61 per cent of the business it wasn't easy to make further acquisitions because you had minority shareholders so I think it positions us to do other things," chief executive Patrick Kennedy said.

Paddy Power will fund the deal with 84m euros of cash (71m), the issue of 14m euros (11.8m) worth of shares and assuming a 3m euros (2.5m) obligation to some Sportsbet employees.

Paddy Power will pay an additional 25m Australian dollars (16m) if Sportsbet's 2013 EBITDA (earnings before interest, taxes, depreciation, and amortisation) exceeds A$80m (52m).

After the Sportsbet acquisition, Paddy Power will have 66m euros (55.9m) in cash, which Kennedy said would help fund any future acquisitions.

He declined to give a profit forecast for next year but said the Sportsbet deal would add to earnings.

Kennedy reiterated Paddy Power was on course for growth of up to 40 per cent in underlying earnings per share this year.

Heavy snowfalls have cancelled some sports fixtures in Ireland and Britain.

Mr Kennedy said Paddy Power would be able to absorb the cancellations.

"Three-quarters of our profits are online and almost half of the paddypower.com online revenues come from games and bingo and poker and casinos and are not dependent on sporting fixtures."