Chris Hughes, Columnist

Private Equity's Poker Face Yields a Jaw-Dropping Payout

Stars may struggle to come anywhere close to matching CVC's returns on Sky Bet.

April 23, 2018 at 1:14 PM UTC

Chris Hughes is a Bloomberg Opinion columnist covering deals. Previously, he worked for Reuters Breakingviews, the Financial Times and the Independent newspaper.

1524489512_GettyImages-949688850 — Photographer: Stu Forster

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The house wins. Private equity has hit the jackpot with a deal to sell Sky Betting & Gaming to Canada's Stars Group Inc. for $4.7 billion. The jaw-dropping returns achieved here are down to a dose of good fortune as much as judgement.

CVC Capital Partners bought an 80 percent stake in the business from its founder, U.K. satellite broadcaster Sky Plc, in 2015. That transaction ascribed this fledgling business an enterprise value of 800 million pounds ($1.1 billion). CVC recouped its approximate 300 million pound starting equity investment via a dividend last year.