LSE listed sports-betting, gaming and interactive entertainment group Entain plc announced on August 11 it has launched Entain CEE, which will spearhead its expansion into the Central and Eastern Europe (CEE) region.
The company also announced the acquisition of Croatian gaming and sportsbook operator SuperSport Group in a deal that values the company at €920m.
Entain is launching Entain CEE in partnership wth Czech-based investment firm EMMA Capital, from which it is buying SuperSport. Entain will hold 75% of the economic rights in Entain CEE, which will be headed by SuperSport’s CEO, Radim Haluza.
Commenting on the reasons for the move, Entain said CEE is a “highly attractive growth market”.
“The c.€5.0bn regulated CEE betting and gaming market provides a significant opportunity for Entain and is expected to grow at least 10% per year through 2025. The CEE market is currently led by local operators who have often struggled to scale or consolidate across the region, providing a compelling opportunity for Entain with its industry-leading capabilities,” the company said.
SuperSport is the market leader in Croatia, with a 54% market share and 70% brand awareness. Entain described the Croatian maket as “attractive and fully regulated”.
“We are excited to create Entain CEE with EMMA to underpin our strategy across the CEE region, and to be acquiring the leading betting and gaming operator in the highly attractive, fully regulated Croatian market,” said Jette Nygaard-Anderson, CEO of Entain.
“We see Croatia as an exciting, dynamic country which Entain CEE is perfectly positioned to expand from – we are very much looking forward to growing our business responsibly within the country and the region.”
Entain will pay EMMA €600m in cash at completion plus a further contingent payment — expected to be €90mn — in early 2023 based on SuperSport’s Ebitda for the financial year ending 2022.
While Entain will take 75% of the economic rights in SuperSport, EMMA will contribute its 25% stake in SuperSport to Entain CEE at an initial implied valuation of €200m. The contingent payment implies an additional €30m value contributed by EMMA.
“The acquisition is expected to value SuperSport at €920m which implies a transaction multiple of 9.6x 2022 Ebitda, or 9.1x 2022 fully synergised Ebitda,” Entain said.
The deal will be financed through a €700m bridge loan from Deutsche Bank, Lloyds, Mediobanca, NatWest, and Santander, according to the press release.
The acquisition is expected to complete in Q4