Betsson AB acquires the privately owned, Georgia based gaming operator Europe-Bet. The company is licensed in 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 on its way to becoming the second largest local online gaming operator in Georgia with close to a 30% market share. It is also 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”, says Magnus Silfverberg, CEO & President of Betsson.
In 2014, revenues amounted to USD 52.4 million. Online operations accounted for USD 40.8 million and the remaining was derived from land-based business, which, to a large extent supports the online business. The online business is mainly Sportsbook driven, which, in 2014, accounted for 44% of the total revenue. Total EBIT amounted to USD 20.0 million; USD 17.9 million of which is attributed to the online operations. The EBIT margin was 38.1% and the company has delivered solid double-digit growth in the last few years.
Some of the founders are to maintain their strategic positions following the acquisition and other key employees have been retained by Betsson so as to ensure that the business can be operated.
Betsson acquired the seller’s shares for the initial purchase price of USD 50 million, which equates to 2.5 times EBIT in 2014. In addition to the initial purchase consideration, the remaining amount of USD 35 million may become payable after one year based on the gambling regulations in Georgia and whether or not they remain unchanged. This implies a maximum purchase consideration of USD 85 million, which corresponds to 4.3 times EBIT for 2014.
The acquisition was financed through the renewal of a credit facility amounting to EUR 35 million, as well as the new credit facility of SEK 700 million. These facilities are both revolving credit facilities that provide a sort of financial flexibility that is attractive. Closing of the deal is expected to take place during July.