The deal grants Entain access to the Dutch regulated market, where BetCity was one of the initial 10 licensees and quickly became a market leader after the market launched on 1 October 2021, holding a 20% market share in Q4 of 2021.
Entain’s brands had not been able to launch in the Nertherlands as part of the initial batch of licensees due to the country’s “cooling-off” period for operators that accepted Dutch customers before the market opened.
While this period ended last year, and Entain had initially expected its legacy brands to receive licences in 2022, this has not yet happened.
“We are pleased to have completed the acquisition of BetCity,” Entain chief executive Jette Nygaar-Andersen said. “The combination of BetCity’s local expertise and strong brand, alongside Entain’s global scale and market-leading platform provides customers with an enriched and broader offering of engaging products, fresh content and new experiences.
“This transaction further underpins our growth strategy of operating in, and expanding further into, attractive regulated markets. We look forward to working with [co-founder and chief executive] Melvin [Bostelaar] and the BetCity team as we execute on the significant opportunities in the Dutch market.”
With the deal closing, Entain will pay €300m as an initial consideration. It will then pay a balancing payment “once BetCity’s financial performance for 2022 is confirmed”, and a further contingent payment of 10 times BetCity’s 2023 EBITDA in early 2024.
It will then pay a final €50m “on delivery of synergies and successful migration to the Entain platform”.
Entain expects the total cost of the acquisition to be €450m, though depending on performance it could be as high as €850m.
Corporate advisory specialist Partis helped negotiate the deal.