FDJ to sell Sporting Solutions as future lies in B2C growth

Groupe Francaise des Jeux (Groupe FDJ) has put its B2B unit Sporting Solutions up for sale and is looking for a buyer for the company it acquired in 2019 for an undisclosed sum.

As reported by Jake Pollard of Gaming&Co, the Paris EuroNext gambling group has recruited London-based M&A specialists Oakvale Partners around two months ago to lead the search for a buyer of Sporting Solutions.

The move comes five years after FDJ’s acquisition of the Sporting Group as it was then called and is part of its plan to focus on core B2C activities and grow its international footprint.

In the past 12 months the French lottery and OSB operator has acquired the Irish lottery group Premier Lotteries Ireland (PLI), the French online horse racing and sports betting brand ZETurf and in late January tabled a €2.5bn bid for Unibet’s parent company Kindred Group.

That offer puts a 24% premium on Kindred’s current share price and is set for review by France’s regulatory authorities over the next nine months.

News of a potential Sporting Solutions sale is not a major surprise. For some time sources close to both companies have expressed misgivings about the fit between the two groups and issues like the lack of integration of Sporting Solutions’ technology into the FDJ structure.

It also comes amid rumours of poor relations between FDJ’s French executives seconded to work with Solutions’ London-based UK teams. Those however have been denied by the sources.

The UK group was also not mentioned amid all the talk of the Kindred acquisition and despite delays to the rollout of the Swedish group’s in-house sportsbook. In the long term FDJ’s strategy will see it move onto Kindred’s platform once it is ready.

In the meantime, Kindred entered into a three-year contract with long-standing betting systems and platform supplier Kambi Group at the start of the year.

Sporting Solutions’ most recent FY22 results showed that gross profit rose 7% to £11.7m but EBITDA losses shot up to £8.5m from £2.5m in 2021. The group said the rise in data and operating costs, the latter rising 45% to nearly £24m in the period, were the main reasons for the losses.

The group said measures would be taken in 2023 to “review the cost base and improve both operational efficiency and profitability”.

Since its privatisation in 2019, FDJ has embarked on an aggressive growth and M&A strategy, its proposed takeover of Kindred being the most prominent example of that policy.

Publishing its 2023 results last week, FDJ recorded a 6.5% rise in FY2023 revenues to €6.5bn and noted that its online NGR now made up 13% (~€338m) of its total NGR of €2.5bn. FDJ, Sporting Solutions and Oakvale Partners were contacted for comment but did not respond.

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Article is published by SBCNews in partnership with Gaming&Co.