OTPP Unloads Premier Lotteries Ireland to French Operator
The company that operates Ireland’s national lottery is to be sold to the operator of France’s own lottery in a deal worth €350m.
The full share capital of Premier Lotteries Ireland (PLI), currently majority owned by the Ontario Teachers’ Pension Plan with minority stakes held by An Post, is to be sold to La Francaise des Jeux, pending approval by the lottery regulator.
That approval is expected to be delivered some time before the end of 2023. The deal has been in gestation for several months after PLI was put up for sale earlier this year.
PLI said that the sale will see the “vast expertise” of the French operator brought to bear on the Irish operation, while nothing will change in terms of how the lottery itself raises funding, given the lottery itself will remain in Irish State ownership.
Vivienne Jupp, chair of PLI, said that the company had “moved from strength to strength” since first winning the licence to operate the Irish lottery in 2014.
She said the company “looks forward to the next chapter of growth, where we will be able to share best practices with FDJ and continue to operate a responsible world-class lottery for the people of Ireland”.
Announcing the deal to the French market, FDJ’s chairman Stephane Pallez said he was “delighted” with the acquisition.
"Becoming a foreign lottery operator marks a major new step in the international development of the FDJ group."Last year, Premier Lotteries Ireland recorded gross revenue of €399m with turnover of €140m, with relative earnings by scale comparable with that of the French operator.
A deal to sell PLI had been well flagged since the beginning of the year.
PLI was first acquired by the Canadian fund in 2014 for €405m via a deal which included a 20-year licence to operate the Irish lottery.
An Post had previously denied that its own minority holding in the company would be sold, even if the OTPP stake were to change hands.
The sale is the latest by OTPP, which previously sold off its lottery businesses in both the UK and Illinois.
Gill Stedman of RTE also reports FDJ to buy operator of the National Lottery for €350m:
French company La Française des Jeux, known as FDJ is to buy the operator of the National Lottery, Premier Lotteries Ireland (PLI) for €350m.
As part of the agreement, FDJ, which is the operator of the French National Lottery, will purchase the shares from Ontario Teachers' Pension Plan, An Post, and An Post Pension Fund.
PLI was awarded a 20 year contract to operate the National Lottery by the Irish Government back in 2014.
It will continue to operate the National Lottery until 2034, and the purchase will not alter this arrangement.
The Irish National Lottery will continue to be owned by the Irish state, and regulated by the Regulator of the National Lottery.
"PLI has moved from strength to strength since winning the licence for the Irish National Lottery," said Vivienne Jupp, Chair of PLI.
"I would like to thank Ontario Teachers’ and An Post for their support in building PLI into a leading European operator in the period since 2014.
"During that time, the team at PLI has delivered for Good Causes and the community and looks forward to the next chapter of growth, where we will be able to share best practices with FDJ and continue to operate a responsible world-class lottery for the people of Ireland," she added.
Ontario Teachers’ Pension Plan, which is the majority shareholder of PLI said it believes FDJ is well positioned to help PLI going forward.
"We're honoured to have partnered with An Post and the PLI team over the last nine years to create an even better lottery for Ireland," said Iñaki Echave, Senior Managing Director at Ontario Teachers' Pension Plan.
An Post also welcomed the sale.
"It’s a positive outcome for Ireland and for the National Lottery that FDJ, a long-established operator of the French lottery has been successful in its bid," said An Post CEO and National Lottery Director, David McRedmond.
"FDJ’s industry expertise will be hugely beneficial to the future operation, and strengthens Ireland’s ties to its nearest EU neighbour," he added.
The sale of PLI to FDJ is for 100% of the share capital, and is subject to regulatory approvals.
France's Option Finance also reported on this deal (translated from French):
La Française des Jeux (FDJ) announces that it has signed an agreement to acquire Premier Lotteries Ireland (PLI), which holds the exclusive rights to operate the Irish National Lottery until 2034. FDJ acquires the entire capital of this company for an enterprise value of 350 million euros. In 2022, the Irish gambling market was ranked 7th in Europe and almost 76% of Irish adults played a lottery game.
Premier Lotteries Ireland has redistributed 65% of its Gross Gaming Revenue (GGR) of €399 million to over 4,000 charities, amounting to nearly €260 million.
It achieved a turnover of 140 million euros with an EBITDA margin comparable to that of the FDJ group.
The closing of this transaction remains subject to the usual conditions precedent, in particular the authorization of the Irish National Lottery regulator, which should take place in the second half of 2023.
OTPP issued this press release on this deal earlier today:
London, UK – 27 July 2023 - Ontario Teachers’ Pension Plan Board (“Ontario Teachers’”) today announced that it has entered into a definitive agreement to sell its majority shareholding in Premier Lotteries Ireland DAC (“PLI”) to La Française des Jeux (“FDJ”), the lottery and online gaming operator. As part of the transaction, PLI’s other shareholders, An Post and the An Post pension fund, also will sell their minority shareholdings in PLI to FDJ.
PLI, headquartered in Dublin, is the operator of the Irish National Lottery having been awarded a 20-year licence by the Irish Government in November 2014. PLI’s core purpose is to operate a responsible world-class lottery for the people of Ireland, raising much needed Good Causes funding for the benefit of local communities throughout the country.
Since being awarded the licence to operate the Irish National Lottery, PLI has brought the game to its strongest-ever position and, in turn, raised over €1.9 billion for Good Causes, with 2021 and 2022 being the most successful years in that regard.
FDJ is the largest French lottery gaming operator and a leading European player, offering responsible gaming and a commitment to Good Causes funding. It operates a diversified gaming range across lottery and sports betting. FDJ and PLI have a long-standing partnership successfully operating the transnational EuroMillions lottery and FDJ has the resources and expertise to support PLI’s continued growth and development.
Iñaki Echave, Senior Managing Director at Ontario Teachers’, said: “We’re honoured to have partnered with An Post and the PLI team over the last nine years to create an even better lottery for Ireland. We’d like to thank the leadership team and PLI employees for their contribution. As long-term investors, we aim to build stronger companies that create value for the communities they serve and PLI has generated record levels of sales and contributions to Good Causes. We also care about entrusting the company to the right new owner and believe that a highly reputed international, like-minded lottery company as FDJ is well positioned to help PLI continue its success story.”
Vivienne Jupp, Chair of PLI, said: “PLI has moved from strength to strength since winning the licence for the Irish National Lottery. I would like to thank Ontario Teachers’ and An Post for their support in building PLI into a leading European operator in the period since 2014. During that time, the team at PLI has delivered for Good Causes and the community and looks forward to the next chapter of growth, where we will be able to share best practices with FDJ and continue to operate a responsible world-class lottery for the people of Ireland.”
Interestingly, back in April, Oliver Barnes and June Webber of the Financial Times reported Allwyn was planning to bid for a majority stake in the Irish lottery:
Allwyn, Europe’s biggest lottery group, is among the operators planning to enter the race to buy a majority stake in the Irish national lottery, hoping to fuel its ambitious expansion plans by snapping up another gaming asset.
Czech Republic-based Allwyn held talks with UBS bankers working on the sale and the Irish lottery’s management team in March, according to people close to the process. The Ontario Teachers’ Pension Plan, which has a stake of nearly 80 per cent in Premier Lotteries Ireland, kicked off a sale process in February.
OTPP was awarded a 20-year licence to run the Irish franchise in 2014, as part of a consortium comprising An Post, the Irish post office, which had operated the lottery since its inception in 1987, and An Post pension funds. The consortium paid €405mn for the licence, which runs through to 2034.
Australian operator The Lottery Corporation and semi-publicly owned French operator Française des Jeux as well as New York-listed lottery companies International Game Technology and Scientific Games are also considering bidding for OTPP’s majority stake, according to two people close to the sale process.
OTPP, Allwyn, The Lottery Corporation and FDJ all declined to comment, while IGT and Scientific Games did not respond to a request for comment.
“Look at the lottery operators that have the money and that are looking for growth and . . . that’s a list that is long enough to have a competitive process but it’s also short enough to be very tailored with only super-motivated buyers,” said a person working on the sale.
Allwyn last year won the tender process for the next UK National Lottery licence, starting in February 2024, and then proceeded to take over incumbent operator Camelot, also owned by OTPP, in a £120mn deal.
Allwyn also bought Camelot Lottery Solutions — which owns the Illinois lottery and runs the technology division of Camelot, operating the online systems for lotteries across Europe and North America — in a separate £200mn deal with OTPP.
The group posted revenues of nearly €4bn last year, up 24 per cent on the year before. Its operations also include lotteries in the Czech Republic, Greece, Italy, Cyprus and Austria.
Allwyn had been planning to go public in a €9.3bn Spac merger with blank-cheque company Cohn Robbins Holdings Corp but both parties called off the deal in September citing volatile market conditions. The lottery operator, which was rebranded from Sazka in 2021, is owned by Czech billionaire Karel Komárek.
As part of the string of deals with OTPP, Allwyn also expressed interest last year in buying the majority stake in Ireland, but OTPP instead opted to auction it off pointing to its value with more than a decade left on the licence.
Since its launch in 1987, Premier Lotteries Ireland has generated more than €5.5bn for good causes, donating around 30 cents of every €1 spent to worthy projects. Last year, the Irish lottery generated gross gaming revenues of €400mn and earnings before interest, taxation, depreciation and amortisation of between €40mn-€45mn.
Some bidders believe Allwyn has a competitive edge in the auction because its subsidiary Camelot Lottery Solutions runs the online draw for the Irish game, while an alternative operator may be put off by having to search for a new technology supplier.
The sale process is expected to be concluded by summer. Any deal would have to be approved by the Irish lottery regulator.
Premier Lotteries Ireland declined to comment on the sale process but said it remained “wholly committed” to operating a “world-class” lottery that raises “much-needed good cause funds for the benefit of local communities throughout Ireland”. The Regulator of the National Lottery and An Post declined to comment.
The Irish National Lottery made history last year, exceeding €1bn in lottery ticket sales in 2021 for the first time in its history, whilst also breaking its record for contributions to good causes.
National lotteries have been very good businesses to own for OTPP but it has been exiting them.
Last November, OTPP sold its stake in Camelot UK Lotteries Limited to Allwy.
At the time, the Financial Times reported:
The lottery is one of the UK government’s most lucrative procurement contracts and the 10-year licence is projected to generate up to £100bn in sales for Allwyn. In the year to the end of March, Camelot reported sales worth £8.1bn.
Since its inception in 1994 the lottery has generated £46bn for good causes, including UK Sport, which supports athletes preparing for the Olympic and Paralympic Games, the Arts Council and the British Film Institute.
As part of its winning bid, Allwyn which changed its name from Sazka Group during the bidding process, pledged to halve ticket prices to £1, double the amount of money generated for good causes and invest heavily in new digital products.
In September, Allwyn, which is owned by Czech billionaire Karel Komárek, called off plans to float on the New York Stock Exchange via a blank cheque company run by Gary Cohn because of unfavourable market conditions.
I covered this deal here and said I wasn't sure why Ontario Teachers' is selling out of Camelot UK but there was controversy last summer when the British media reported Canadian teachers could "rob" £600 million from money meant for good causes in Britain for their pension fund if Camelot wins a legal battle that it unfairly lost out on running the National Lottery for the next 10 years.
I don't particularly like lotteries as a business because I view them as a form of taxation on the poor. And even though Camelot UK and Premier Lotteries Ireland give a good chunk of their gains to good causes, I think it's a hard sell for OTPP to classify this under a responsible investment.
Whatever the case, OTPP is getting out of the lotteries business, that much is clear.
Below,
Taoiseach (Irish PM) Leo Varadkar said her music "was loved around the world and her talent was unmatched".
Irish President Michael D Higgins praised O'Connor's "authenticity" as well as her "beautiful, unique voice".
"What Ireland has lost at such a relatively young age is one of our greatest and most gifted composers, songwriters and performers of recent decades, one who had a unique talent and extraordinary connection with her audience, all of whom held such love and warmth for her," he said.
died tragically in January 2022
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