The deal between the two parties was originally announced for an initial consideration of €300 million ($324 million) and a maximum deferred contingent consideration of €550 million ($594 million) in June 2022.
Now, Entertain has presented the completion of all procedures for a final acquisition cost of €450 million ($484.2 million). The total cost, which was negotiated by corporate advisory specialist Partis, could go as high as €850 million, depending on BetCity’s performance.
Entain Getting Access to the Netherlands’ Gaming Market
The newly inked agreement will bring the leading sports betting and gaming group access to the regulated gaming market in the Netherlands. BetClic, the popular operator of the successful online casino and sports betting platform based in Amsterdam was given one of the original 10 licenses in the country.
BetClic rapidly turned into a leading operator once the market officially launched on October 1, 2021. During the fourth quarter of 2021, BetCity had already announced a 20% market share.
Entain’s brands were unable to launch on the market because they lacked the necessary licenses. This problem was generated by the country’s two-year cooling-off period for licensees that was proposed by the Dutch Gaming Authority in July 2019.
The cooling-off period was completed in 2022. However, Entain did not receive the expected licenses for its legacy brands. Now, with BetClic’s acquisition finally coming to an end, explained Entain’s chief executive Jette Nygaar-Andersen, Dutch customers can prepare themselves for “an enriched and broader offering of engaging products”.
This will come on top of the newly generated content and fresh gaming experiences awaiting them. The mix between BetCity’s domestic expertise and powerful brand and Entain’s global reach and top platform will now be possible thanks to the new acquisition.
Nygaar-Andersen expressed the group’s excitement to be collaborating with BetCity’s co-founder and chief executive Melvin and the company’s team while pursuing all the fresh opportunities provided by their access to the market.
The Deal’s Consideration Structure
As mentioned earlier, the initial consideration for the acquisition was capped at €300 million ($324 million) which would have been paid on completion. The balancing payment will be paid once BetCity will have its 2022 financial performance confirmed.
An additional contingent payment calculated based on BetCity’s EBITDA x10 for 2023 would also be paid at the start of 2024. A contingent payment of €50 million ($54 million) would also be paid at the end of BetCity’s transfer to Entain’s platform and upon the effective delivery of synergies.
In the following three years, the combination could deliver around €28 million ($21.6 million) of cost synergies mostly from content, royalty benefits, and technology.
Last October, 1×2 Network announced it would roll out its games via the BetCity.nl platform. The following month, Entertain Entain Central and Eastern European announced the completion of the acquisition of the SuperSport Group in Croatia.