Entain plc (ENT), a sports betting, gaming and interactive entertainment company on Tuesday said it agreed to acquire BetEnt B.V., which trades under the BetCity.nl name, from Sports Entertainment Media B.V.
The deal is for an initial consideration of 300 million euros (approximately 257 million pounds) and deferred contingent consideration of up to 550 million euros (approximately 472 million pounds).
The initial consideration is payable in cash at completion, and the balance in early 2023 based on the actual performance of BetCity in the financial year 2022. The initial consideration would be funded from existing cash resources and drawings on the group’s revolving credit facility.
A further contingent payment would be paid in early 2024, based on 10x BetCity’s EBITDA for the financial year 2023, less amounts already paid out.
In addition, a final contingent payment of 50 million euros (approximately 43 million pounds) would be paid on delivery of synergies and successful migration to the Entain Platform.
The total consideration payable on current expectations is 450 million euros (approximately 386 million pounds). However, dependent on the performance of BetCity, the maximum consideration is capped at 850 million euros (approximately 729 million pounds).
The combination is expected to deliver approximately 28 million euros (approximately 24 million pounds) of cost synergies, predominantly from technology, content and royalty benefits, by the end of 2026.
The acquisition is expected to complete during the second half of 2022. BetCity was advised by Partis Capital, Proskauer Rose, HVK, Brandeis and KPMG.
Headquartered in Amsterdam, Netherlands, BetCity had received an online sports betting and gaming licence from the KSA (Kansspelautoriteit), the Dutch Gaming and Gambling Authority, in October 2021.
Shares of Entain plc closed Monday’s trading at $16.09, down $1.35 or 7.74 percent from the previous close.
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