REG - Entain PLC - Acquisition of Avid Gaming

EntainAnnouncement

07/02/2022 15:45

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RNS Number : 9350A  Entain PLC  07 February 2022

7 February 2022

Entain plc

("Entain" or the "Group")

 

Acquisition of Avid Gaming including leading Canadian online sports betting
and gaming brand Sports Interaction

 

Entain plc (LSE: ENT), the leading global sports betting, gaming and
interactive entertainment operator ("Entain" or the "Group"), announces today
that it has acquired Deis Ltd ("Avid Gaming" or the "Company") for CAD300
million (approximately £174m(1)) from Middlebrook Investments Limited.

Avid Gaming owns Sports Interaction, Canada's leading online sports betting
brand. It is headquartered in Jersey (Channel Islands), with offices in the
Mohawk Territory of Kahnawà:ke and Ireland.

Avid Gaming exclusively licenses the Sports Interaction trademark and provides
proprietary online betting and gaming products and services to the Mohawk
Council of Kahnawà:ke ("MCK") and the Mohawk Online socioeconomic initiative.
Mohawk Online, which is wholly-owned by the MCK, operates Sports Interaction
in Canada.

Canada is a highly attractive and fast-growing sports betting and gaming
market. Together with Entain's application for an Ontario licence, this
acquisition provides an excellent opportunity to drive further growth, in line
with the Group's growth and sustainability strategy.

Sports Interaction's sports-led offering is highly complementary to Entain's
existing Canadian business, comprising the Party and bwin brands. The
combination will bring Entain's global scale, expertise and market-leading
platform together with Sports Interaction's local expertise, capabilities and
partnerships. As a result the combined business will provide customers with a
broader offering of engaging products and services for the Canadian market.
 Will Golby, Avid Gaming's CEO, along with other members of the leadership
team, will transition to Entain.

The Group is delighted to continue supporting the socioeconomic efforts of the
Mohawks of Kahnawà:ke through Sports Interaction's unique exclusive
relationship with Mohawk Online. In line with economic principles adopted by
Canada under the United Nations Declaration on the Rights of Indigenous
Peoples, Mohawk Online revenues are invested back into the community of
Kahnawà:ke to provide essential funding for cultural and language programmes,
schools, healthcare and other public services. 50% of Avid Gaming employees in
Kahnawà:ke are Mohawk, and in 2020 Mohawk Online revenues played a vital role
in Kahnawà:ke's Covid 19 relief efforts.

Sports Interaction has experienced rapid growth in recent years with gross
revenues in 2021 increasing by c40% year on year to CAD76million
(approximately £44m(1)).  The business generated EBITDA of CAD18m
(approximately £10.4m(1)) and profits before tax of CAD17.4 million
(approximately £10.1m(1)) in the year ended 31 December 2021 (after the
contribution to the community of Kahnawà:ke).  As at 30 September 2021, it
had gross assets of approximately CAD41.0 million (approximately £23.7m(1)).
 

The combination is expected to deliver approximately CAD15 million
(approximately £8.7m(1)) of synergies in 2023, predominantly from technology,
content and procurement benefits.  This results in a post synergies
acquisition multiple for Entain of approximately 7x 2023 EBITDA.  The
consideration for the acquisition has been paid from existing facilities.

 

Jette Nygaard-Andersen, CEO of Entain plc, comments:

"Sports Interaction is the leading Canadian sports betting and gaming brand
and is aligned perfectly with our own ambitions of great customer service and
ambitious growth, coupled with an unwavering commitment to sustainability.
 It is highly complementary to our existing operations in Canada, and the
combination of its local expertise and Entain's powerful platform will provide
customers with an unrivalled range of exciting and engaging products in this
fast-growing market. We look forward to welcoming Will Golby and his team to
Entain.

Investing in the communities where we operate is a key pillar of Entain's
sustainability strategy. We are therefore delighted to be supporting the
Mohawk Online socio-economic initiative."

 

Will Golby, CEO of Avid Gaming, comments:

"We are delighted to be joining forces with Entain, which is an exceptional
company combining world-class brands, strong leadership and a winning
strategy. It has a unique approach to local markets, and no other company of
its scale consistently delivers so many well-executed, localised approaches to
the same level of customisation and detail. Entain's commitment to
sustainability, responsible gaming and community investment aligns exactly
with our own business philosophy, and we look forward to a bright future
together."

 

Kahsennenhawe Sky-Deer, Grand Chief of Mohawk Council of Kahnawà:ke,
comments:

"Entain is a world class operator with a genuine desire to positively
contribute to the communities in which it operates. Kahnawà:ke is well known
in the gaming industry, not only for our internationally recognized
jurisdiction through the Kahnawà:ke Gaming Commission, but also for our
socio-economic initiative, Mohawk Online. This new partnership between Entain
and the Mohawks of Kahnawà:ke is mutually beneficial, and brings with it
prime opportunity for bolstering our self-sufficiency through the continuing
success of Sports Interaction."

 

Note: (1) CAD / GBP FX rate of 0.5788 as of 4 February 2022

 

Enquiries:

 Investor Relations - Entain plc                        investors@entaingroup.com (mailto:investors@entaingroup.com)

 David Lloyd-Seed,                                      david.lloyd-seed@entaingroup.com (mailto:david.lloyd-seed@entaingroup.com)

 Group Director of IR & Corporate Communications

 Davina Hobbs, Head of Investor Relations

 Callum Sims, Investor Relations Manager                davina.hobbs@entaingroup.com (mailto:davina.hobbs@entaingroup.com)

                                                        callum.sims@entaingroup.com
 Media - Entain plc                                     media@entaingroup.com

 Tessa Curtis, Head of Group PR & Media Relations       tessa.curtis@entaingroup.com (mailto:tessa.curtis@entaingroup.com)

 Jay Dossetter, Head of ESG and Press Office            jay.dossetter@entaingroup.com (mailto:jay.dossetter@entaingroup.com)
 Media - Powerscourt                                    Tel: +44 (0) 20 7250 1446

 Rob Greening / Nick Hayns                              entain@powerscourt-group.com

 

LEI: 213800GNI3K45LQR8L28

 

About Entain:

Entain plc (LSE: ENT) 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, Bet.pt, Coral, Crystalbet, Eurobet, Ladbrokes, Neds and
Sportingbet; Gaming Brands include CasinoClub, Foxy Bingo, Gala, Gioco
Digitale, Ninja Casino, Optibet, partypoker and PartyCasino. The Group owns
proprietary technology across all 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 has a joint-venture with MGM Resorts International creating a
leader, BetMGM, in sports-betting and iGaming in the US. Entain provides the
technology which powers BetMGM and exclusive games and products, specially
developed at its in-house gaming studios. The Group is tax resident in the UK
with licenses in a total of 27 regulated markets. Entain is a leader in ESG, a
member of FTSE4Good, the DJSI and is AA rated by MSCI. The Group has set a
science-based target, committing to be carbon net zero by 2035 and through the
Entain Foundation supports a variety of initiatives, focusing on safer
gambling, grassroots sport, diversity in technology and community projects.

For more information see the Group's website: www.entaingroup.com

The person responsible for arranging for the release of this announcement on
behalf of the Company is Emily Carey (Company Secretary).

 

About Avid Gaming:

Avid Gaming is headquartered in Jersey with offices in Kahnawà:ke (MCK) and
Ireland. The company is the exclusive supplier of the Sports Interaction
trademark and gaming products and services to Mohawk Online, a socioeconomic
initiative wholly-owned and governed by the Mohawk Council of Kahnawà:ke
(MCK).

Avid Gaming retained Partis as advisor for the transaction.

 

Important notices

Certain statements in this announcement are forward-looking statements with
respect to the Company's expectations, intentions and projections regarding
its future performance, strategic initiatives, anticipated events or trends
and other matters that are not historical facts and which are, by their
nature, inherently predictive, speculative and involve risks and uncertainty
because they relate to events and depend on circumstances that may or may not
occur in the future. All statements that address expectations or projections
about the future, including statements about operating performance, strategic
initiatives, objectives, market position, industry trends, general economic
conditions, expected expenditures, expected cost savings and financial results
are forward‐looking statements. Any statements contained in this
announcement that are not statements of historical fact are, or may be deemed
to be, forward‐looking statements. These forward-looking statements, which
may use words such as "aim", "anticipate", "believe", "could", "intend",
"estimate", "expect", "may", "plan", "project" or words or terms of similar
meaning or the negative thereof, are not guarantees of future performance and
are subject to known and unknown risks and uncertainties. There are a number
of factors including, but not limited to, commercial, operational, economic
and financial factors, that could cause actual results, financial condition,
performance or achievements to differ materially from those expressed or
implied by these forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond the Company's ability to
control or estimate precisely, such as changes in taxation or fiscal policy,
future market conditions, currency fluctuations, the behaviour of other market
participants, the actions of governments or governmental regulators, or other
risk factors, such as changes in the political, social and regulatory
framework in which the Company operates or in economic or technological trends
or conditions, including inflation, recession and consumer confidence, on a
global, regional or national basis. Given those risks and uncertainties,
readers are cautioned not to place undue reliance on forward-looking
statements. Forward-looking statements speak only as of the date of this
announcement. The Company and its affiliates, and any of its or their
respective directors, officers, partners, employees, advisers or agents
(collectively, "Representatives") expressly disclaims any obligation or
undertaking to update or revise publicly any forward-looking statements,
whether as a result of new information, future events or otherwise unless
required to do so by applicable law or regulation.

In particular, no statement in this announcement is intended to be a profit
forecast or profit estimate and no statement of a financial metric (including
estimates of EBITDA, profit before tax, free cash flow or net debt) should be
interpreted to mean that any financial metric for the current or future
financial years would necessarily match or exceed the historical published
position of the Company and its subsidiaries. Certain statements in this
announcement may contain estimates. The estimates set out in this announcement
have been prepared based on numerous assumptions and forecasts, some of which
are outside of the Company's influence and/or control, and is therefore
inherently uncertain and there can be no guarantee or assurance that it will
be correct. The estimates have not been audited, reviewed, verified or subject
to any procedures by the Company's auditors. Undue reliance should not be
placed on them and there can be no guarantee or assurance that they will be
correct.

This announcement is being issued by and is the sole responsibility of the
Company. No representation or warranty, express or implied, is or will be made
as to, or in relation to, and no responsibility or liability is or will be
accepted by or on behalf of the Company (apart from the responsibilities or
liabilities that may be imposed by the Financial Services and Markets Act
2000, as amended or the regulatory regime established thereunder) or by its
affiliates or any of its Representatives as to, or in relation to, the
accuracy, adequacy, fairness or completeness of this announcement or any other
written or oral information made available to or publicly available to any
interested party or its advisers or any other statement made or purported to
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Representatives in connection with the Company and any responsibility and
liability whether arising in tort, contract or otherwise therefore is
expressly disclaimed.

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