Entain Sets Its Sights on Central and Eastern Europe with SuperSport Acquisition
Published August 19, 2022 by Shane
Entain will soon be a Central and Eastern European gambling and betting powerhouse thanks to the acquisition of Croatia’s leading betting site, SuperSport.
Online gambling stalwart Entain announced that it would spearhead its growth in Central and Eastern Europe (CEE) with an exciting new acquisition. The deal will see Entain acquire a 75% stake in Croatian betting market leader, SuperSport.
Entain will partner with Emma Capital, a Czech investment management company, to facilitate the deal and comply with the local regulatory requirements. The new venture will operate in the region under the name Entain CEE.
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.
The Perfect Croatian Storm
At first glance, the decision to stage a CEE expansion using a Croatian betting platform might seem unusual. It becomes clear once you understand the market reach and financial opportunities presented by the SuperSport brand.
Jette Nygaard-Anderson, Entain's CEO, said:
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.
The strategic logic behind the acquisition:
- High growth potential: Regulated betting in Croatia is worth €5 billion annually and is expected to increase another 10% by 2025.
- SuperSport is a market leader: The betting company was the ideal acquisition target because it controls more than 50% of the Croatian market.
- Top tier financial profile: SuperSport has reported an annual net gaming increase of 17% per annum, a 52% EBITDA ratio, and a 90% cash conversion ratio.
It is clear from the above that the combination of Croatia being a fully regulated market and SuperSport's fantastic operational position make it the ideal vehicle for Entain's growth into CEE.
An Enticing Financial Proposition
The deal has been constructed so that while Entain will initially hold 75% of the new company, it can own 100% within three years from closing.
The deal breakdown is:
- Entain will pay EMMA €600 million in cash for 75% in SuperSport
- Entain will pay an additional €90 million in 2023
- EMMA will pay €200 million for a 25% stake in Entain CEE
- EMMA will make a €30 million contingent payment
The deal values SuperSport at €920 million, a valuation nearly 10 times the betting and gambling company's 2022 EBITDA! Once the deal is expected to be completed late this year, assuming it receives regulatory approval.
