Entain To Acquire BetEnt, for Up To EUR850M – FinSMEs

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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. 
Led by Melvin Bostelaar, CEO, BetCity is an Amsterdam, The Netherlands-based operator for online sports betting and casino games. 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. Through its partners, BetCity has dedicated native speaking Dutch dealers on blackjack and roulette tables in Eindhoven and in Madrid. The company received an online sports betting and gaming licence from the Kansspelautoriteit (KSA), the Dutch Gaming and Gambling Authority, in October 2021. 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 newly regulated Netherlands online market is highly attractive and fast-growing across both sports betting and gaming. Since its licensing in October 2021, BetCity has delivered rapid growth, establishing a leading position with approximately 20% market share during the fourth quarter of 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 owns a comprehensive portfolio of established brands; Sports Brands include bwin, Bet.pt, Coral, Crystalbet, Eurobet, Ladbrokes, Neds, Sportingbet and Sports Interaction; Gaming Brands include CasinoClub, Foxy Bingo, Gala, GiocoDigitale, Ninja Casino, Optibet, Partypoker and PartyCasino. The company also owns proprietary technology across all its core product verticals and in addition to its B2C operations provides services to a number of third-party customers on a B2B basis.
The Group has a 50/50 joint venture, BetMGM, a leader in sports betting and iGaming in the US. Entain provides the technology and capabilities which power BetMGM as well as exclusive games and products, specially developed at its in-house studios. The group is tax resident in the UK with operations in a total of 31 regulated or regulating territories.
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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