London, 18 October 2005.  HgCapital, the European sector-focused private equity investor, today announced that it has agreed to acquire Sporting Index Group Limited (“Sporting Index”) from Duke Street Capital for a total cash consideration of £75.8 million.  Management will continue to manage the business going forward and will retain a meaningful stake in the company. 

Founded in 1992, Sporting Index is the recognised leader in sports spread betting, with a market share of approximately 70% in the UK.  It offers more markets (approximately 23,000), more fun bets and more choice than any other sports spread betting company.  It is also the only sports spread betting company to offer continuous 24 hour betting and sports spread betting on Sky TV.  Furthermore, it has recently expanded its product portfolio by developing a unique range of spread betting games.

Sporting Index’s management team, led by Chief Executive Richard Glynn, has been successful in restructuring the business over the past 3 years and in growing customer recruitment and bet volumes by approximately 50% and 37% respectively over that period.

While recent historical focus of the company has been on the continued evolution of the core UK sports spread betting business, HgCapital will now work closely with management to leverage the strength of Sporting Index’s core business, both organically and by acquisition, to build a broader-based betting and gaming group.  This will involve not only the roll-out of the proven Sporting Index sports spread betting model into new jurisdictions but also a further expansion of the product range, both domestically and internationally.

This acquisition underlines HgCapital’s commitment to, and expertise in, the gaming and broader leisure sector. HgCapital, until recently an investor in Irish bookmaker Paddy Power, has developed strong relationships in the gaming and gambling sector and is ideally placed to support Sporting Index’s growth in this exciting market.

Ben Hewetson, Director and Head of Leisure Investments at HgCapital said:

“Over the past 3 years, Sporting Index’s management team has built a market leading business which they have developed significantly, most notably in terms of distribution and product development.  Over 70% of all bets are now placed via the internet and the company continues to develop its distribution channels to meet changing customer needs, as evidenced by the recent developments of its Sky TV and mobile telephone channels.  The recently launched range of spread betting games is already showing good signs of growth.

We believe that Sporting Index represents a robust base from which to build, both organically and by acquisition, a larger betting and gaming group, taking advantage of the exciting growth opportunities in its target markets.  We look forward to working with management through the next phase of the company’s development.”

Richard Glynn, Chief Executive of Sporting Index said:

“We are delighted to be working with HgCapital.  It has a long and successful track record of working alongside leisure-related businesses.  Their Leisure Team has demonstrated an excellent understanding of the potential of the business and shares our vision for the on-going growth of the group.  We are confident that they are the right partner both for the business and for management and will provide the support that we need to fulfil our ambitions for Sporting Index.”