Betsson AB, a Swedish gambling operator, announced earlier today that it is to purchase Georgia-based privately-owned gaming company Europe-Bet. The latter entity is holding a Georgian license and is targeting the country’s regulated market, as it presents similar conditions to those in regulated markets within the European Union.
Once the acquisition is completed, Betsson would become the second biggest gambling operator to provide its services on the territory of Georgia. The company would hold a 30% market share, thus strengthening its positions in the region.
Magnus Silfverberg, who is to resign from his positions of Chief Executive Officer and President of Betsson in July, commented that through the purchase of Europe-Bet, his company would create foundations for “profitable and sustainable growth” both in and outside Georgia.
Last year, Europe-Bet generated revenue of $52.4 million. Of those, the company’s online operations accounted for $40.8 million. The remaining portion of the revenue came from its land-based business. Europe-Bet’s online operations are mostly represented by its Sportsbook platform. It generated 44% of the entire revenue in 2014. EBIT totaled $20 million, of which online business accounted for $17.9 million.
Betsson is to acquire the Georgia-based operator for an initial price of $50 million or 2.5 times of the 2014 EBIT. An additional amount of $35 million might be paid after one year, provided that no changes in Georgia’s current gambling regulations are implemented. In other words, the total price of the purchase might reach $85 million or 4.3 times the 2014 EBIT.
The Swedish gambling operator said that it intends to renew a credit facility of €35 million and to use a new credit facility totaling SEK700 million, in order to fund its newest acquisition. The deal is expected to be closed sometime in July.
Gernandt & Danielsson Advokatbyrå was named legal advisor to Betsson and PwC would act as financial advisor to the gambling operator. On the other side, Europe-Bet would be advised by Legal Partners Associated LLC and EY.
Betsson is to provide more information on the new acquisition on Friday, July 17, when the company would present its second quarter financial results. The company posted revenue of SEK847 million for this year’s first quarter, up 24% year-on-year.
