SBC News Voice of the Sports Betting Industry
Entain Plc has published all documents related to a proposed plan to bookbuild £600m in new capital, which will be primarily used to acquire STS Group – Poland’s largest bookmaker.
The London Stock Exchange (LSE) has been informed that shares of the FTSE100 gambling group will be offered to institutional investors through an accelerated bookbuild process. In addition, Entain will host a ‘separate retail offer’ to common market investors via the PrimaryBid platform.
The filing informed that “Entain CEE has launched a tender offer (the “Offer”) to acquire 100% of STS Holding S.A. (“STS”), the leading sports-betting operator in Poland listed on the Warsaw Stock Exchange (WSE).”
The acquisition will be carried out by the Entain CEE unit, in partnership with private equity fund EMMA Capital, who are committed to funding 25% of the offer.
Entain CEE has priced an offer to acquire the entire stake of STS at a purchase price of PLN 24.80 per share, representing a significant premium of 35% to the 6-month volume weighted average price. The offer also includes a 28% premium to the 3-month volume weighted average price and a 20% premium to the spot price as of 12 June 2023 – a premium that values STS Group at circa £750m.
Dealmakers outlined that the acquisition of STS presents the outright opportunity for Entain to become the leading sports betting platform for Central and Eastern Europe (CEE), taking the gold podium place in the region’s largest marketplace.
Jette Nygaard-Anderson, Entain’s CEO, commented “We are delighted to be acquiring the leading sports-betting operator in Poland, which is a hugely exciting and fast-growing market. STS is an exceptional business with a great brand, a compelling omnichannel offering, and an outstanding CEO and management team.”
The transaction is perfectly aligned with our Entain CEE strategy and our wider M&A strategy of acquiring high quality businesses with leading positions in attractive, growing and regulated markets. Expansion across Central and Eastern Europe remains a core component of our growth plans, and STS will be an integral part of our platform in that region.
The Juroszek Family, represented by CEO Mateusz Juroszek and his father Zbigniew Juroszek, who collectively own a 70% shareholding in STS, have entered into a binding agreement and accepted an offer.
Mateusz Juroszek will continue to lead the company and join the board of Entain CEE, leveraging his expertise in driving growth in the Polish gaming market.
“We could not have found a better partner to help us take STS into the next phase of its growth, and it is clear that Entain shares our ambition and vision for its future. I look forward to continuing to lead and grow STS, and to working in close collaboration with the Entain CEE team.” – read a statement by Juroszek
The Entain CEE venture was founded last summer, following the £690m purchase of Croatia’s SuperSport. Entain maintains a majority stake of 75% in the organization formed in partnership with EMMA Capital.
An enlarged Entain CEE will be led by Radim Haluza, who will continue to oversee the growth strategy of STS and SuperSport as individual brands.
The acquisition is forecasted to be earnings effective from “the first complete year of ownership” as STS has demonstrated a strong financial performance of +24% NGR since 2020. Coupled with anticipated synergies amounting to over £10m in terms of run-rate, it’s estimated that this acquisition will contribute positively to earnings from the first year of ownership.
Prior to commencing the bookbuild, Entain cites that all major shareholders have expressed support for the placing and acquisition of STS.
Entain will use the funds from the equity raise for its broader strategy if the acquisition does not proceed.
The joint bookrunners, Bank of America Securities and Morgan Stanley, along with co-manager Santander, will oversee the equity raise, and the Placing Shares and Retail Offer Shares will have the same rights as existing ordinary shares of Entain.
