Entain To Acquire BetEnt, for Up To EUR850M

Entain plc (LSE: ENT), a global sports betting, gaming and interactive entertainment group, is to acquire BetEnt B.V., which trades as BetCity.nl, from Sports Entertainment Media B.V.

The initial consideration of deal is €300m while the deferred contingent consideration is up to €550m as detailed below.

BetCity, a Dutch-based online casino and sports betting operator, is headed by Melvin Bostelaar. It offers products like slot games, sports betting, and live casino with the support of some partners, like Evolution, Kambi, Stakelogic, Oryx, and Pragmatic, among others. BetCity has partnered with native Dutch speaking dealers to run blackjack and roulette tables in Eindhoven as well as Madrid. In October 2021, BetCity received an online gambling and sports betting license from Kansspelautoriteit. People can also look for the best online bingo for real money at several other casino sites.

BetCity’s offering is complementary to Entain’s bwin and Party brands which are awaiting approval for a licence to operate in the Netherlands. This is now expected during the latter part of this year as the KSA has already requested additional documentation as part of the ongoing application process. The merger of BetCity’s local expertise, brand and large diverse user-base, with Entain’s global scale and platform will provide customers with a broader offering of engaging products, fresh content and new experiences.
Following the close of the deal, Melvin Bostelaar, BetCity’s CEO, along with other key members of the leadership team, will remain with the company.

The Netherlands’ new online market is very attractive and rapidly growing in both gaming and sports betting. BetCity’s licensing in October 2021 has seen rapid growth. It now holds a dominant position with around 20% market share in the fourth quarter 2021. This acquisition will create a strong market operator with significant growth opportunities, in line with the Group’s strategy.

Led by Jette Nygaard-Andersen, CEO, Entain is a FTSE100 company and one of the world’s largest sports-betting and gaming groups, operating both online and in the retail sector. The group has a diverse portfolio of established brands. These include Bet.pt. Coral, Crystalbet. Eurobet. Ladbrokes. Neds. Sportingbet. Entertainment Brands include CasinoClub. Gala, GiocoDigitale. Partypoker. PartyCasino. In addition to providing services to B2C customers, the company has proprietary technology in all of its core product lines.
BetMGM has a 50/50 joint venture with the Group, which is a leader for iGaming and betting sports in the US. Entain supplies the technology and capabilities that power BetMGM, as well as exclusive products and games created at its in-house studios. The company is a UK tax resident and has operations in 31 regulated or regulating countries.

The consideration structure of the deal – which is expected to complete during the second half of 2022 – includes an initial consideration of €300m, which is payable in cash at completion, with a balancing payment to be paid in early 2023 based on the actual performance of BetCity in 2022. It will be funded from existing cash resources and drawings on the group’s revolving credit facility. An additional contingent payment will be paid in early 2024, based on 10x BetCity’s EBITDA for 2023, less amounts already paid out. In addition, a final contingent payment of €50m will be paid on delivery of synergies and migration to the Entain Platform. Given all this, the total consideration payable on current expectations is €450m. However, depending on the performance of BetCity, the maximum consideration will be €850m. The combination is expected to deliver approximately €28m of cost synergies, predominantly from technology, content and royalty benefits, by the end of 2026.

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