# Entain acquires leading online sports betting and gaming operator, BetCity

- Link: https://www.directorstalkinterviews.com/entain-acquires-leading-online-sports-betting-and-gaming-operator-betcity/4121068427
- Published: 2022-06-14T07:48:19+01:00
- Author: Amilia Stone

**[Entain plc](https://www.directorstalkinterviews.com/ftse-company/entain-plc/ent.l)**(
LON:ENT), the leading global sports betting, gaming and interactive entertainment
group, has announced 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 €300m (approximately £257m^(1)) and deferred 
contingent consideration of up to €550m (approximately £472m^(1)).

BetCity is one of the Netherlands’ leading online sports betting and gaming operators.
Headquartered in Amsterdam, BetCity received an online sports betting and gaming
licence from the KSA (_Kansspelautoriteit_), the Dutch Gaming and Gambling Authority,
in October 2021.

The newly regulated Netherlands online market is highly attractive and fast-growing
across both sports betting and gaming.  Since its licensing in October 2021, BetCity
has delivered rapid growth, establishing a leading position with approximately 20%
^(2) market share during the fourth quarter of 2021.  This acquisition will create
a strong market operator with significant growth opportunities, in line with the
Group’s strategy.

BetCity’s offering is highly complementary to Entain’s bwin and Party brands which
are awaiting approval for a licence 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.

Melvin Bostelaar, BetCity’s CEO, along with other key members of the leadership 
team, will remain with the Company.  

Consideration structure:

·      Initial consideration of €300m (approximately £257m^(1)) 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, less amounts already paid out;

·      In addition, a final contingent payment of €50m (approximately £43m^(1)) 
will be paid on delivery of synergies and successful migration to the Entain Platform;

The total consideration payable on current expectations is €450m (approximately 
£386m^(1)).  However, dependent on the performance of BetCity, the maximum consideration
is capped at €850m (approximately £729m^(1)).  The combination is expected to deliver
approximately €28m (approximately £24m^(1)) 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 acquisition is expected to complete during H2 2022.

> **Jette Nygaard-Andersen, CEO of Entain, comments:**
> “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.”

> **Melvin Bostelaar, CEO of BetCity, comments:**
> “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
> for 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. 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.”

**Notes**

_The Acquisition constitutes a Class 2 transaction for the purposes of the UK Listing
Rules._

_(1) EUR / GBP FX rate of 0.8580 as per Bloomberg on 13th June 2022_

_(2) Source KSA report GGR Q4 2021 Online kansspelmarkt: de stand van zaken [–](https://kansspelautoriteit.nl/nieuws/2022/maart/online-kansspelmarkt-stand-zaken/)
Kansspelautoriteit _

_(3) For the purposes of UK LR 10.4.1 R, as at 31 December 2021, BetCity had gross
assets of approximately €20.7m (approximately £17.8m^(1)) and generated profits 
of €2.0m (approximately £1.7m^(1)) in the year ending 31 December 2021_

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