TIDMENT
RNS Number : 9012K
Entain PLC
07 January 2021
7 January 2021
Entain plc
("Entain" or the "Group")
Entain extends into the Baltic Markets with GBP250m Offer for
Enlabs AB
Full year expectations upgraded
Entain plc (LSE: ENT), the global sports-betting and gaming
group, formerly known as GVC Holdings, has today announced a
recommended cash offer for Enlabs AB ("Enlabs" or the "Company").
The acquisition further delivers on Entain's strategy of expansion
across new regulated international markets.
Highlights
-- A recommended cash offer of SEK 40 for each Enlabs share
-- This values Enlabs at around SEK 2.80 billion (approximately GBP250 million) (1)
-- The offer represents a premium of approximately 15.6% and
42.3% compared to the volume-weighted average price of an Enlabs
share during the last 90 and 180 trading days prior to the
announcement of the offer, respectively
-- The offer has been recommended by Enlabs' board, and
shareholders holding in aggregate approximately 42.2% of the total
number of Enlabs shares have undertaken to accept the offer
-- Enlabs is an established and leading gaming company operating
in fast-growing markets across the Baltics, with further growth
opportunities across Eastern Europe and the Nordics
-- Based on analyst consensus(2) for the year to 31 December
2021 Enlabs is estimated to generate net gaming revenue of EUR89.5m
(c.GBP80.5 million) and EBITDA of EUR23.5m (c.GBP21.1 million)
(3)
-- The acquisition is expected to be earnings accretive in
Entain's first full year of ownership
-- Full year 2020 EBITDA is now expected to be in the range of
GBP825m to GBP845m, representing an increase of 6-8% compared to Q3
guidance
Delivering Entain's growth strategy
Enlabs predominantly operates online sports-betting and gaming
brands across the fast-growing Baltic region with a small retail
presence. It is the market leader in Latvia, the second largest in
Estonia and a top-five operator in Lithuania. In November 2020
Enlabs completed the acquisition of Global Gaming, which enables
Enlabs to extend its operations into the Nordics through successful
and proven gaming brands, including Optibet, Laimz and Ninja.
The acquisition of Enlabs is directly aligned with Entain's
stated growth strategy of entering locally regulated markets where
it does not currently have a presence. The Group believes that
Enlabs' regional market and brand strength combined with Entain's
scale, proprietary technology, product, marketing and regulatory
expertise can further accelerate growth and expansion into new
territories - both through Enlabs' brands as well as by leveraging
Entain's existing brands. The Group also expects to deliver synergy
benefits through economies of scale, sharing of best practices and
removal of Enlabs' public company costs.
Enlabs has a strong management team led by Niklas Braathen, who
has been instrumental in driving the rapid growth of the business
over the last seven years. Entain will retain the services of
Niklas to develop the Group's operations in the region and its
expansion into new markets. Furthermore, through a family holding
company and subject to the offer being declared unconditional,
Niklas has undertaken to invest EUR 15 million into shares in
Entain within four months of receipt of the consideration under the
offer. The holding company has undertaken not to sell or otherwise
dispose of such shares before 31 December 2023.
Timing and financing
The transaction is expected to complete in Q1 2021, subject,
inter alia, to requisite regulatory approvals being obtained and
sufficient Enlabs shareholders accepting the offer such that Entain
becomes the owner of shares in Enlabs representing more than 90% of
the total number of Enlabs shares (on a fully diluted basis).
Further details of the offer, including conditions relating to
completion, are contained in the offer announcement issued
separately this morning, a copy of which is available at
www.entaingroup.com.
Entain will finance the cash consideration of approximately
GBP250 million from its existing cash resources. It is expected
that the acquisition will add approximately 0.2x to Entain's net
debt to EBITDA ratio for 2021.
Shay Segev, Entain's CEO, commented :
"The acquisition of Enlabs is perfectly aligned with our
strategy of expanding across new regulated international markets.
We are hugely excited by the growth opportunities it presents both
in its existing markets and through new market opportunities.
Enlabs is already a strong and rapidly growing business in its own
right, but we now have a fantastic opportunity to turbocharge its
growth by leveraging the power of our unparalleled proprietary
technology, scale, product and marketing expertise."
Niklas Braathen commented:
"When Entain's interest to acquire Enlabs emerged, we instantly
saw the strategic logic. Our interaction with them so far has
confirmed that they will provide an excellent home for the Company,
its customers and employees. Entain's experience and track record
in many different geographic markets, together with its
market-leading proprietary technology and world-class marketing
skills are key attractions for Enlabs as we look to grow in the
Baltics and beyond. Finally, Enlabs has achieved an enormous amount
as an independent business, but we recognise the established trend
of industry consolidation and the growing importance of scale."
Current trading
Entain will announce trading for the fourth quarter and full
year 2020 on 21 January 2021. However, following continued strong
performance through the final quarter of 2020 and despite the
adverse impact of localised lockdowns on our Retail business, full
year 2020 EBITDA is now expected to be in the range of GBP825m to
GBP845m, representing an increase of 6-8% compared to Q3
guidance.
On 22 December 2020 the Group received GBP217m from HMRC in
settlement of historical tax claims. In combination with the strong
EBITDA performance, year-end net debt to EBITDA for the financial
year to 31 December 2020 is expected to be approximately 2.1x.
Conference call
An analyst call will be held at 9:00am (GMT) today. Participants
may join the call by dialling one of the following numbers
approximately 15 minutes before the start of the call:
To participate in the Q&A, please also connect via the
conference call dial in details.
UK +44 33 0606 1122
US +1 646 813 7960
Room number: 133775
Participant PIN: 6876
There will be a live audio webcast available via the following
link:
https://brrmedia.news/wd9nj
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation EU 596/2014 as it forms
part of retained EU law (as defined in the European Union
(Withdrawal) Act 2018).
The acquisition of Enlabs constitutes a class 2 transaction for
the purposes of the UK Listing Rules. For the purposes of LR 10.4.1
R (Notification of class 2 transactions), as at 30 September 2020,
the gross assets of Enlabs were EUR90.6m and as at 30 June 2020 the
gross assets of Global Gaming were SEK253.7m. In the financial year
to 31 December 2019 the profit before tax for Enlabs was EUR9.4m
and for Global Gaming was a loss of SEK119.0m.
Enquiries:
Investor Relations
Entain plc
David Lloyd-Seed, Director of Investor Relations & External Communications investors@entaingroup.com
Jennifer Spencer, Investor Relations Manager
Media
Entain plc
Tessa Curtis, Head of Media Relations tessa.curtis@entaingroup.com
Jay Dossetter, Head of ESG and Press Office jay.dossetter@entaingroup.com
Powerscourt
Rob Greening / Elly Williamson Tel: +44 (0) 20 7250 1446
entain@powerscourt-group.com
Notes
(1) The SEK/GBP currency exchange rate applied for purposes of
such conversion is 11.191, as derived from Oanda.com as of 5
January 2021.
(2) Analyst consensus consists of financial estimates accessed
through the Enlabs website and consists of Redeye (22 November
2020) with Sales of EUR93m and EBITDA of EUR25m, and Introduce /
ABG Sundal Collier (12 November 2020) with Sales of EUR86m and
EBITDA of EUR22m. The opinions, forecasts, estimates, projections
or predictions made by these analysts reflect their own views and
do not represent the opinions, forecasts, estimates, projections or
predictions of either Entain or Enlabs or their management.
Further, the reference to them does not imply that either Entain or
Enlabs endorses, concurs with or adopts such analyst estimates.
Neither Entain nor Enlabs assumes any liability for the accuracy or
completeness of such estimates. Neither Entain nor Enlabs
undertakes any obligation to update or revise such estimates, even
if they differ from their own forecasts or expectations.
(3) The GBP/EUR currency exchange rate applied for purposes of
such conversion is 1.112, as derived from Oanda.com as of 5 January
2021.
LEI: 213800GNI3K45LQR8L28
Forward-looking statements
This document contains certain statements that are
forward-looking statements. They appear in a number of places
throughout this document and include statements regarding our
intentions, beliefs or current expectations and those of our
officers, directors and employees concerning, amongst other things,
results of our operations, financial condition, liquidity,
prospects, growth, strategies and the business we operate. These
forward-looking statements include all matters that are not
historical facts. By their nature, these statements involve risks
and uncertainties since future events and circumstances can cause
results and developments to differ materially from those
anticipated. Any such forward-looking statements reflect knowledge
and information available at the date of preparation of this
document. Other than in accordance with its legal or regulatory
obligations (including under the Market Abuse Regulation (596/2014)
(as such regulation forms part of retained EU law (as defined in
the European Union (Withdrawal) Act 2018 and as amended (if
applicable) by the Market Abuse (Amendment) (EU Exit) Regulations
2019 (Regulation 2019//310)), the Listing Rules, the Disclosure
Guidance and Transparency Rules and the Prospectus Rules), Entain
undertakes no obligation to update or revise any such
forward-looking statements. Nothing in this document should be
construed as a profit forecast. Entain and its directors accept no
liability to third parties in respect of this document save as
would arise under English law.
About Entain plc
Entain plc (LSE: ENT) (Formerly GVC Holdings PLC) is a FTSE100
company and is one of the world's largest sports-betting and gaming
groups, operating both online and in the retail sector. The Group
owns a comprehensive portfolio of established brands. Sports brands
include bwin, Coral, Crystalbet, Eurobet, Ladbrokes, Neds and
Sportingbet; gaming brands include CasinoClub, Foxy Bingo, Gala,
Gioco Digitale, partypoker and PartyCasino. The Group owns
proprietary technology across all of its core product verticals and
in addition to its B2C operations provides services to a number of
third-party customers on a B2B basis. The Group's unique technology
platform also powers BetMGM, the joint-venture it operates with MGM
Resorts to capitalise on the rapidly regulating US sports betting
and iGaming market. Entain is tax resident in the UK with licences
in more than 20 countries, across five continents. The Group's
commitment to delivering sustainability and growth is recognised
through its membership of the FTSE4Good and DJSI ESG indices, which
identify companies that meet globally recognised corporate
responsibility standards. Further information about Entain is
available at www.entaingroup.com
About Enlabs AB
Enlabs owns and manages companies that are active in the gaming
and media sector. The Company creates entertainment in three
business areas namely gaming, media and solutions. Gaming, online
casinos and land-based gaming stores operate under prime brands
such as Optibet and NinjaCasino. The firm's products are casino,
betting, poker, bingo, fantasy- and virtual sports. Within the
media segment, Enlabs conducts performance-based marketing towards
the online gaming sector whereas, in the solutions business area,
the Company's B2B operations include service for sports results and
technology solutions. The Company generates a significant majority
of its revenue from the gaming area. The operating subsidiaries
hold national licences for their operations and the group employs
approximately 330 employees. The corporate group has offices in
Tallinn, Riga, Vilnius, Malta, Marbella, Minsk and Stockholm.
Enlabs' shares are listed on the Nasdaq First North under ticker
symbol NLAB.
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