24 APAC / Issue 3 2018 , On the 6th March, leading provider of technology- based products and services in the global gaming and interactive entertainment industries, The Stars Group Inc. announced that it has entered into definitive agreements to increase its equity interest in CrownBet Holdings Pty Limited from 62% to 80% and for CrownBet to acquire William Hill Australia Holdings Pty Ltd., creating a leader in the regulated Australian online sports betting market. The aggregate purchase price for both transactions will be approximately $315 million, of which $234 million will be payable in cash for William Hill Australia and the remainder will be payable in approximately 3.1 million newly-issued common shares of The Stars Group for the increased equity interest in CrownBet. Unless otherwise noted, references to “$” are to U.S. dollars and “A$” are to Australian dollars. “These acquisitions will further increase our exposure to the attractive regulated Australian sportsbook market and create a player of scale and clear rival to the top two operators there,” said Rafi Ashkenazi, Chief Executive Officer of The Stars Group. “With complementary geographic profiles, we expect the combined business to leverage CrownBet’s operating and proprietary technology platform and be well positioned for growth and to navigate the ongoing regulatory and taxation changes in the Australian market.” The Stars are Aligned The StarsGroup enters into agreements to increase ownership in CrownBet and acquireWilliamHill Australia. In 2017, William Hill Australia generated unaudited annual revenues of A$190.5 million and unaudited annual EBITDA of A$49.6 million, while CrownBet generated unaudited annual revenues of approximately A$204.0 million and unaudited annual EBITDA of approximately A$7.9 million. The Stars Group currently anticipates the transactions will be accretive at a combined valuation of approximately 12.1 times unaudited 2017 EBITDA of A$57.5 million before anticipated synergies. “I am excited to partner with The Stars Group,” said Matthew Tripp, Chief Executive Officer of CrownBet. “We believe the acquisition of the William Hill Australia business, gives us the scale and customers to become a leading force in the market, and the tools we will need to prepare for potential positive regulatory movement in other jurisdictions.” William Hill’s presence in the Australian sports betting market evolved through the 2013 acquisitions of Sportingbet and tomwaterhouse.com . At the time of its acquisition by William Hill, the Sportingbet business in Australia included both Centrebet and a sports betting business founded by Mr. Tripp and his family. Following the acquisitions, William Hill changed the brands to William Hill Australia and migrated all customers to its platform. CrownBet’s management team, including Mr. Tripp, will operate the combined business in Australia, which The Stars Group currently estimates will realise gross cost synergies of approximately A$50 million per year beginning in 2019 after a period of expected incremental integration and rebranding costs. The Stars Group anticipates such synergies to exceed the potential impact from expected point of consumption taxes in Australia. The management team of CrownBet will be entitled to an additional payment of up to approximately $182 million in 2020 subject to certain performance conditions and payable in cash and/or additional common shares at The Stars Group’s discretion. The Stars Group will retain its right to appoint a majority of the directors on the board of directors of CrownBet. To finance the cash portion of the purchase price for the transactions, The Stars Group obtained committed financing for a $325 million incremental first lien term loan. Of the common share portion, approximately 64% of the shares will be subject to transfer restrictions for a customary period. The transactions are conditional on obtaining approval by the Northern Territory Racing Commission and the Australian Foreign Investment Review Board, and The Stars Group’s acquisition of the additional interest in CrownBet is conditional on the acquisition of William Hill Australia. The issuance of The Stars Group’s common shares is also subject to approval by the Toronto Stock Exchange. The Stars Group currently expects the transactions to close in April 2018. Macquarie Capital (USA) Inc. acted as sole financial advisor to The Stars Group, Deutsche Bank Securities Inc. and Macquarie Capital (USA) Inc. provided the committed debt financing, and PJT Partners LP acted as financial advisor to the Board of Directors of The Stars Group.