Entain CEE to seek Central and Eastern European acquisitions

Entain expects to close a deal to buy Croatia
Entain expects to close a deal to buy Croatia

Entain CEE aims to become the major operator in the region, starting with a majority stake in Croatia’s SuperSport.

UK.- The online gaming giant Entain has launched a new venture, Entain CEE, dedicated to Central and Eastern Europe. It’s begun with the acquisition of a 75 per cent stake in Croatian market leader SuperSport from EMMA Capital. The Czech investment firm will become a partner in Entain CEE.

Entain will pay around €600m cash for the stake in SuperSport, plus a further payment depending on performance but estimated at €90m. SuperSport holds around 54 per cent of the Croatian market. Current CEO Radim Haluza will continue to lead the company after the deal closes in Q4.

Entain CEO Jette Nygaard-Andersen said: “By bringing together Entain’s global expertise and EMMA’s regional investment track record, we are creating a growth platform with considerable opportunity. Expansion across CEE is a core component of our growth strategy, and we look forward to having Radim on board to help drive this opportunity.”

She added: “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.

“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.”

Pavel Horák, EMMA’s chief investment officer, said: “EMMA is very happy to be partnering with the leading global betting, gaming and interactive entertainment business to unlock the opportunity posed by the CEE betting and gaming market.

“We see the Entain CEE structure as a clear opportunity for creating value for shareholders, and we look forward to working closely and collaboratively with Entain.”

Haluza said: “I am looking forward to joining with Entain and further building on the significant opportunity presented in this region. The prospect of leading Entain CEE to drive expansion in fully regulated markets is an exciting opportunity, and EMMA’s investment expertise combined with Entain’s world-class platform will give us the competitive edge in delivering on the CEE opportunity.”

Entain said SuperSport’s forecast EBITDA for 2022 is around €96m. It expects SuperSport to contribute positive earnings within its first full year of ownership and to contribute cost synergies of €5m by 2024. It will finance the deal with a €700m bridge loan from Deutsche Bank, Lloyds, Mediobanca, NatWest, and Santander.

Entain CEE plans further acquisitions in the region

Entain said the acquisition is just the start of its plans to become a regional leader. Its board noted that the CEE region has strong players in individual markets but that operators had largely not managed to expand. It said this meant there was an opportunity for Entain to help such brands expand beyond their home markets.

The board said: “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.”

Entain will have an option in its contract to allow it to buy out EMMA after three years. It didn’t say at what cost. The group already has a presence in Eastern Europe through Enlabs. It hasn’t said if the two entities will be combined or remain separate.

The Entain board added: “The combination of Entain’s global scale, access to capital and content, EMMA’s regional knowledge and connectivity, alongside the expert local operational knowledge of Radim and his team, makes Entain CEE uniquely positioned to unlock the significant opportunity across the region.

“This bespoke structure will allow Entain to join with further leading local operators through Entain CEE to continue to grow this unique platform across the region.”

Announcing its H1 results, Entain reported an 18 per cent rise in revenue but noted that online revenue had fallen due to the impact of inflation.

Entain also announced in June an agreement to buy the Dutch online sports betting and gaming operator BetEnt from Sports Entertainment Media. Entain will pay an initial €300m in cash on completion, followed by a deferred contingent consideration of up to €550m for the operator, which trades as BetCity.

Last month, Entain promoted Dominic Grounsell to the position of chief commercial officer. Grounsell has been serving as deputy managing director for digital since January.

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