Equity firm puts its money on bookies

Feb 6 2008 by Peter McCusker, The Journal

A BOOKMAKERS founded by two former school pals has secured a multi-million pound war chest to fund its rapid expansion with a view to making it one of the largest in the UK.

Pagebet Ltd now has 26 shops in the North-East and the Midlands and wants to have a 100-plus estate within three years.

The rapid expansion plans have been boosted after founders Austin Carney and David Archer, who went to Houghton-le-Spring Grammar School together, attracted a multi-million pound investment from Advantage Capital.

The deal gives the London-based private equity firm a 45% stake in both businesses while allowing Pagebet to push on with its plans to be a UK top-six player within two years.

The deal comes one year after Durham-based Pagebet sold two thirds of its estate – 44 shops – to Gala Coral.

Managing director Mr Archer said: “Last year’s sale released the capital we needed to get us to where we are now.

“We have grown from the 15 shops we retained to 26 in the North-East and Midlands in the last 12 months and invested heavily in our head office, tele-betting and internet systems.

“The investment by Advantage Capital is critical in that it gives us a real war chest on which to draw, to see out our business plan and to reach our target of becoming a top-six bookmaker within two years.”

Pagebet Bookmakers has plans to open five new shops in Doncaster, Hartlepool, Newcastle, Selby and Sunderland.

Major acquisitions in the North and Midlands are also ready to complete, taking the number of shops toward 50.

The company currently employs 180 staff and says this could rise to around 700 in three years. Turnover stands at £10m and could rise to £40m over the same period.

Commercial director Mr Carney added: “The investment from Advantage Capital will allow us to go forward with the acquisitions we have planned and means we can look forward to more growth and further improvement in the quality of our estate over the next few years.

“In addition to acquiring individual shops and groups throughout the UK, we are also ready to launch our internet betting site with its full games package including bingo, casino and poker.” Martin Bodenham, a director of Advantage Capital, said: “We are delighted to back two proven money-makers in the continued expansion of their business.” The two friends have extensive knowledge of the betting industry, having first teamed up in the late 1980s to buy the six-shop Reuben Page chain in County Durham. Their first major group acquisition was the 13-shop Fosters chain in Sunderland.

Over the next six years they continued to acquire existing individual businesses and small groups, building the business to 59 shops before selling 44 to Gala Coral. Mr Carney added: “The industry is going through a lot of changes. With the introduction of all-year-around evening opening and a tighter regulatory framework, we expect many smaller bookmakers to be looking to leave the industry. We are now in a great position to take advantage quickly of any opportunities.”