Waterhouse, who will remain with the company following the acquisition, has built up his brand through deals with television stations Channel 7 and Channel 9.
William Hill will pay £20 million up front and will take on £3m of debt. Waterhouse could receive a further £40m if the business hits profit targets by 2015.
The deal comes hot on the heals of William Hill’s £460m takeover of Sportingbet’s Australian arm earlier this year as the British firm looks to take on indigenous outfit Tabcorp.
William Hill said that there was little duplication between Waterhouse’s 75,000 customers and the 98,000 on its existing databases, with many of Waterhouse’s clients described as “recreational” punters.
Chief executive Ralph Topping said: “Acquiring tomwaterhouse.com gives us a rapidly growing business that appeals to a wider customer base.”
Ivor Jones, an analyst at Numis Securities, said: “This is a small acquisition, but Waterhouse is one of the fastest-growing betting businesses in Australia with a high consumer profile and some valuable – albeit expensive – media deals.
“Returns from the Sportingbet acquisition have been lacklustre to date and we believe this is a sensible deal, which will cement William Hill’s leading position and enhance its potential in Australia.”
William Hill’s shares closed down 2.2p at 444.4p.