Entain acquires BetCity
Entain plc has agreed to acquire the entire share capital of BetEnt B.V., which trades under the BetCity.nl name from Sports Entertainment Media B.V. for an initial consideration of €300m (approximately £257m) and deferred contingent consideration of up to €550m (approximately £472m).
BetCity received an online sports betting and gaming licence from the KSA (Kansspelautoriteit), the Dutch Gaming and Gambling Authority, in October 2021.
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 with approximately 20% market share during the fourth quarter of 2021.
BetCity’s offering is highly complementary to Entain’s bwin and Party brands which are awaiting approval for a licence to operate in the Netherlands – now expected during the latter part of 2022. The combination of BetCity’s local expertise, strong brand and large diverse user-base, with Entain’s global scale and market-leading platform will provide customers with a broader offering of engaging products, fresh content and new experiences.
Melvin Bostelaar, BetCity’s CEO, along with other key members of the leadership team, will remain with the Company.
Initial consideration of €300m (approximately £257m) is payable in cash at completion, with a balancing payment to be paid in early 2023 based on the actual performance of BetCity in the financial year 2022;
A further contingent payment will be paid in early 2024, based on 10x BetCity’s EBITDA for the financial year 2023, less amounts already paid out
In addition, a final contingent payment of €50m (approximately £43m) will be paid on delivery of synergies and successful migration to the Entain Platform
The total consideration payable on current expectations is €450m (approximately £386m). However, dependent on the performance of BetCity, the maximum consideration is capped at €850m (approximately £729m). The combination is expected to deliver approximately €28m (approximately £24m) of cost synergies, predominantly from technology, content and royalty benefits, by the end of 2026.
The initial consideration will be funded from existing cash resources and drawings on the Group’s revolving credit facility.
The acquisition is expected to complete during H2 2022.
Jette Nygaard-Andersen, CEO of Entain, said: “We are delighted that BetCity is joining Entain and are excited by the significant opportunities in the newly regulated Dutch market. This acquisition will provide customers with an even better experience as we combine BetCity’s local expertise and brand alongside Entain’s market leading, customer focused platform. This transaction further underpins our growth strategy of operating in attractive regulated markets. We look forward to working with Melvin and the BetCity team.”
Melvin Bostelaar, CEO of BetCity, added: “We are happy to be joining forces with a world-class group in Entain. Together we will be well-placed to maintain a strong market position in the Dutch market for the coming years. Entain’s market leading platform, technology, established brands and global scale provides a fantastic opportunity to expand and enrich our customer offering. Both BetCity and Entain position the customer at the heart of everything we do, with Entain’s core values and philosophy in responsible gaming, compliance and company-culture seamlessly aligning with those of BetCity. We look forward to a bright future together.”