Global sports betting and gaming group Entain announced Tuesday that it has agreed to acquire the entire share capital of BetEnt B.V. –which trades under the BetCity.nl name– from Sports Entertainment Media B.V. for an initial consideration of €300 million ($314 million) and deferred contingent consideration of up to €550 million (approximately $575.75 million).
“This acquisition will create a strong market operator with significant growth opportunities, in line with the group’s strategy,” the company stated in a London Stock Exchange filing. The acquisition is expected to complete during H2 2022.
The company described BetCity as “one of the Netherlands’ leading online sports betting and gaming operators.” Headquartered in Amsterdam, BetCity received an online sports betting and gaming license from the KSA (Kansspelautoriteit) -the Dutch Gaming and Gambling Authority- in October 2021.
Entain described the newly regulated Netherlands online market as “highly attractive” and “fast-growing” across both sports betting and gaming. According to a press release, since its licensing in October 2021, BetCity has delivered rapid growth, establishing a leading position with approximately 20% market share during the fourth quarter of 2021.
Welcome, everyone, to @BetCity_NL! 🥳
Today, our family grew even bigger as we announce the latest brand to join our team. Based in the Netherlands, BetCity is one of the leading operators in the region for sports betting and iGaming. 🇳🇱https://t.co/eRmvy3lVnN#ItsYourGame
— Entain (@EntainGroup) June 14, 2022
According to the company, BetCity’s offering is “highly complementary” to Entain’s bwin and Party brands, which are awaiting approval for a license to operate in the Netherlands – now expected during the latter part of this year as the KSA has recently requested additional documentation as part of the ongoing application process.
“The combination of BetCity’s local expertise, strong brand, and large diverse user-base, with Entain’s global scale and market-leading platform will provide customers with a broader offering of engaging products, fresh content, and new experiences,” they added. They further explained that Melvin Bostelaar, BetCity’s CEO, along with other key members of the leadership team, will remain with the company.
According to the press release, the initial consideration of €300 million ($314 million) is payable in cash at completion, with a balancing payment to be paid in early 2023 based on the actual performance of BetCity in the financial year 2022.
A further contingent payment will be paid in early 2024, based on 10x BetCity’s EBITDA for the financial year 2023. The company explained that lesser amounts have already been paid out. In addition, a final contingent payment of €50 million ($52.34 million) will be paid on delivery of synergies and successful migration to the Entain Platform.
The total consideration payable on current expectations is €450 million ($471 million). However, dependent on the performance of BetCity, the maximum consideration is capped at €850 million ($889.89 million). The combination is expected to deliver approximately €28 million ($29.31 million) of cost synergies, predominantly from technology, content, and royalty benefits, by the end of 2026.
The initial consideration will be funded from existing cash resources and drawings on the group’s revolving credit facility, the company explained.
“We are delighted that BetCity is joining Entain and are excited by the significant opportunities in the newly regulated Dutch market. 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. We look forward to working with Melvin and the BetCity team,” said Jette Nygaard-Andersen, CEO of Entain.
“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 in the coming years. Entain’s market-leading platform, technology, established brands, and global scale provides a fantastic opportunity to expand and enrich our customer offering,” added Melvin Bostelaar, CEO of BetCity.
“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,” BetCity’s boss concluded.
