Tabcorp Holdings’ proposed acquisition of wagering technology supplier BetMakers Technology Group will have a neutral impact on the company’s credit profile, according to Fitch Ratings.
In a commentary issued on Tuesday, Fitch described the acquisition as ‘modestly supportive’ of Tabcorp’s business profile, while saying the financial impact should remain manageable under the proposed terms.
Fitch said the deal supports Tabcorp’s plans to modernize its tote wagering platform and strengthen control over key technology capabilities. The acquisition could reduce its dependence on external providers, consolidate its platforms and improve product development.
BetMakers could also provide some diversification through contracted B2B revenue and international operations, while supporting Tabcorp businesses including Sky Racing World and PGI. However, Fitch expects the benefits to be ‘incremental rather than transformational’, as the combined group would remain mainly exposed to wagering and racing.
Tabcorp plans to acquire BetMakers through a scheme of arrangement for AU$0.24 ($0.17) per share, valuing the business at about AU$270 million ($190 million). Shareholders can receive cash or partly new Tabcorp shares, with the share component capped at 25 percent of the total consideration.
Fitch expects Tabcorp’s net leverage, measured against EBITDAR, to rise to about 2.5 times in fiscal 2027 if the transaction is entirely funded in cash. It is forecast to decline to around 1.5 times by fiscal 2030, supported by BetMakers’ earnings and AU$30 million ($21.2 million) in targeted cost savings.
The agency maintained Tabcorp’s rating at BBB- with a stable outlook, saying the expected increase in leverage remained consistent with its current assessment. Integration risk was considered moderate.
However, Fitch identified the Australian Transaction Reports and Analysis Centre (AUSTRAC) investigation as the main near-term risk to Tabcorp’s finances. Material penalties, legal costs or remediation expenses could weaken cash flow and delay debt reduction.
