Interactive
Georgia – Betsson acquires a leading gaming operator in the Georgian market
By Phil - 30 June 2015
Betsson AB has bought the privately owned gaming operator Europe-Bet based in Georgia.
The company is licensed in, as well as targeting, the regulated Georgian market, a market with conditions similar to the new locally regulated gaming markets within the EU. As a result of the acquisition, Betsson is becoming the second largest local online gaming operator in Georgia with close to 30 per cent market share, meanwhile strengthening its strategic market position in the region.
“Europe-Bet has established a strong brand with a competitive multi-product offering in the locally regulated market of Georgia. Together with Betsson’s technology, a foundation for profitable and sustainable growth within and outside Georgia is created,” said Magnus Silfverberg, CEO & President of Betsson.
In 2014, revenues amounted to US$52.4m, where online operations accounted for US$40.8m, and the remaining part came from land-based business, which to a large extent supports the online business. The online business is mainly Sportsbook driven, which accounted for 44% of total revenue in 2014. Total EBIT amounted to USD$20m of which US$17.9 m is attributed to the online operations. The EBIT margin was 38.1 per cent and the company has delivered solid double digit growth in the last years.
Betsson acquires the company from a group of entrepreneurs. Some of the founders will continue in strategic positions after the acquisition. Betsson has also retained other key employees to continue to operate the business.
Betsson acquires the shares from the sellers for an initial purchase consideration of US$50m, which corresponds to 2.5 times EBIT in 2014. In addition to the initial purchase consideration, a remaining amount of maximum US$35m may become payable after one year based on that the gambling regulation in Georgia remains unchanged. This implies a maximum total purchase consideration of US$85m, which corresponds to 4.3 times EBIT for 2014.
The acquisition is financed through a renewal of a credit facility amounting to €35m, as well as a new credit facility of SEK 700m. These facilities are both revolving credit facilities which give an attractive financial flexibility.
