Entain Plc has agreed to acquire BetEnt BV, the Dutch licensed operator of BetCity.nl, in a move to secure a leading presence within the Netherlands’ newly regulated online gambling regime.
This morning, FTSE100 Entain announced that it had entered a deal to acquire BetEnt’s entire share capital from owner Sports Entertainment Media BV for an initial consideration of €300m (£257m).
Boosting BetEnt’s valuation, the deal will carry a deferred contingent consideration of up to €550m (approximately £472m).
One of the Dutch KOA regime’s first licensed operators, BetCity received an online sports betting and gaming licence from the Kansspelautoriteit (KSA), the Netherlands Gambling Authority, in October 2021 as the Dutch market was officially launched.
Entain deems BetCity to be highly complementary with its Bwin and Party Gaming brands that are awaiting Dutch market approval – as BetCity has established a ‘leading position with approximately 20% market share during the fourth quarter of 2021’
“We are delighted that BetCity is joining Entain and are excited by the significant opportunities in the newly regulated Dutch market,” commented Entain Group CEO Jette Nygaard-Andersen.
“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.”
A breakdown of deal terms saw Entain disclose that the €300m fee will be paid in early 2023 as a cash reward based on the actual performance of BetCity in the financial year 2022.
The deal’s €550m contingency reward will be paid out in 2024, and will be based on a target of BetCity’s 10x EBITDA for the financial year 2023 – ‘less amounts already paid-out’.
Entain outlined: “The total consideration payable on current expectations is €450m (approximately £386m1). However, dependent on the performance of BetCity, the maximum consideration is capped at €850m (approximately £729m).”
The transaction, which is expected to be completed by H2 trading, will be funded from Entain existing cash resources and revolving credit facility.
Entain will maintain BetEnt Amsterdam-based presence led by Melvin Bostelaar, CEO of BetCity, who will lead the brand’s continued development alongside other key members of the leadership team, that will aim to secure €28m in cost synergies by the end of 2026, predominantly attributed to technology, content and royalty benefits.
“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,” remarked Bostelaar.
“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.”