Interactive

Croatia – Entain acquires SuperSport for £600m and creates CEE focused platform

Entain has partnered with Czech Republic’s EMMA Capital to establish a new venture, Entain CEE, to drive expansion in Central and Eastern Europe. Entain will own 75 per cent of the economic rights in Entain CEE and announced the launch of the new entity alongside news that it had acquired the SuperSport Group, the gaming and sportsbook operator in Croatia from EMMA.

Jette Nygaard-Anderson, Entain‘s CEO, commented: “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. 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.”
 
Entain is creating platform in the CEE region, led by SuperSport’s CEO, Radim Haluza, combining Entain’s global scale, access to capital and content, with EMMA’s regional knowledge and connectivity, alongside the expert local operational knowledge of Radim and his team. The bespoke structure will allow Entain to join with local operators through Entain CEE to continue to grow the platform across the region.

Radim Haluza, SuperSport’s CEO commented: “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 is to pay EMMA €600m in cash for 75 per cent of the economic rights in SuperSport, with a further contingent payment made to EMMA in early 2023 based on SuperSport’s EBITDA for the financial year ending 2022. This payment is expected to be €90m. EMMA will contribute their 25 per cent stake in SuperSport to Entain CEE at an initial implied valuation of €200m, with the contingent payment implying an additional €30m value contributed by EMMA.
 
The Acquisition is expected to value SuperSport at €920m which implies a transaction multiple of 9.6x 2022 EBITDA, or 9.1x 2022 fully synergised EBITDA. EMMA is also entitled to enhanced dividends from completion to the end of 2024, which will be linked to the performance of SuperSport. It is expected that the consideration, plus enhanced dividends, will imply a multiple of less than 10x LTM SuperSport EBITDA at each stage.

Pavel Horák, EMMA’s Chief Investment Officer, commented: “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”
 
The acquisition will be financed through a €700m bridge loan from Deutsche Bank, Lloyds, Mediobanca, NatWest, and Santander. The acquisition will increase Entain’s pro-forma net debt to EBITDA leverage ratio in 2022 by 0.4x. The acquisition is expected to complete in Q4 2022 and is conditional upon regulatory approvals.
 
There is an option on EMMA’s stake that can be exercised three years from closing by either party, giving Entain a path to 100 per cent ownership.