Electra and Pi Capital win on Sporting Index

Duke Street Capital’s £52.7 million offer for gambling and spread betting business, Sporting Index, provides an exit for the company’s original investors, which include the Electra Investment Trust and Pi Capital. David Giampaolo, chief executive of business angel club Pi Capital, said all of Sporting Index’s investors had realised good returns with some making in excess of 10 times their money.

Sporting Index was formed in April 1992 to specialise in sports spread betting. It now has a 50 per cent share of the UK spread betting market. It also offers conventional gambling services, including football and horse racing, which accounts for a quarter of its bets. In July 2001, Sporting Index launched SportingIndex.com, an interactive on-line sports spread betting service.

Pi Capital first funded Sporting Index in May 1999. The £3 million investment included £1 million from an individual member. This allowed the company to expand into financial spread betting and to launch its on-line offshore service. Last year Sporting Index sold its financial spreads division to Zetters for £8.7 million.

Pi Capital also contributed £410,00 to the second round of funding, which totaled £6.3 million, in March 2001.Two years ago sports and leisure group Enic planned to acquire Sporting Index but the deal fell through. Last year the company disposed of Sporting Odds, its loss-making fixed-odds business, which Sportingbet.com bought for a total consideration of £4.5million.

Duke Street Capital is reported to be considering a bid for another spread betting firm, IG Index, which it could merge with Sporting Index. These deals follow a number of investments in the leisure sector, such as Esporta, Invicta, Leisure Link and Gala.

The acquisition of Sporting Index includes debt funding provided by Royal Bank of Scotland. M&C Ventures, advised sporting Index’s management team Saffery Champness Corporate Finance advised the independent directors and Duke Street Capital was advised by KPMG Corporate Finance.