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Entain announces acquisition of BetCity

14 Jun 2022

(PRESS RELEASE) -- Entain plc, the leading global sports betting, gaming and interactive entertainment group, today announces that it 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 is one of the Netherlands’ leading online sports betting and gaming operators. Headquartered in Amsterdam, 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, establishing a leading position with approximately 20%2 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.

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 this year as the KSA has recently requested additional documentation as part of the ongoing application process. 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.

Consideration structure:

- 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.
 
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