Entain CEE to buy STS Holding
Entain’s CEE joint venture will pay around £750m for the Polish sports betting operator in its biggest acquisition to date.
Poland.- Entain CEE, a joint venture owned by the UK-listed gambling giant and the Czech investment fund Emma Capital, has agreed to buy Poland’s STS Holding. It will pay PLN24.80 per share, valuing the deal at around £750m.
Entain CEE was established last year with the intention of seeking opportunities in central and Eastern Europe. In November, it acquired SuperSport, the leading bookmaker in Croatia for around €600m. Entain aims to use the acquisition to establish a presence and launch wider growth in Balkan markets.
It will now buy a controlling 70 per cent share in STS from family foundations owned by chief executive Mateusz Juroszek and his father Zbigiew. They have signed a binding agreement to accept the offer. They will reinvest a portion of their proceeds into Entain CEE, granting them 10 per cent of the business depending on financial targets.
Juroszek will stay on as CEO, a position he’s occupied for 11 years. He will also join the Entain CEE board. Entain said he was critical to STS’s growth.
Juroszek said: “I am very excited to be joining the board of Entain CEE, and see significant growth opportunities in the Polish market for STS under Entain’s ownership.
“Entain is a world-class operator and has already made a significant investment in this region through SuperSport in Croatia. 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.”
In STS, Entain is buying the leading sports betting brand in the CEE region’s biggest economy, where the gaming market is forecast to grow by 12 per cent in the next three years. Polish gambling was worth $1.6bn last year. Online casino in Poland is currently the preserve of national lottery operator Totalizator Sportowy, but Entain believes STS will be well placed to take advantage if the market is liberalised.
STS reported net gaming revenue of PLN663m for 2022, 82 per of which came from online betting. The brand has 400 retail betting shops.
Entain CEO Jette Nygaard-Andersen said: “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 acquisition will be funded by Entain and Emma capital based on their respective stakes in Entain CEE. Entain is the majority shareholder with 75 per cent of the business. It plans to raise £600m through an equity placement and a retail offer to existing shareholders. The remaining funds from the placement will be used for future acquisitions in the near term.
The acquisition is dependent on regulatory approval. Entain hopes to complete in the third quarter. Morgan Stanley is acting as the lead financial advisor.
