Entain, owner of Ladbrokes Coral bookmakers, has agreed a £250m deal to buy Swedish online sports betting and gaming company Enlabs amid a rush of consolidation across the gambling sector.
The group, which also operates the Partypoker and Bwin brands, said on Thursday that it had made an all-cash offer of SKr40 per Enlabs share, valuing the Riga-based company at about £250m — a 15.6 per cent premium compared with the volume weighted average price of Enlabs stock over the past 90 days.
The deal by Entain, previously known as GVC, comes just days after it announced it had rebuffed a proposed £8bn takeover by the US casino giant MGM Resorts, saying it “significantly undervalued” the company.
The move on Enlabs is the first concrete step by Entain’s new chief executive Shay Segev to broaden the company’s reach into locally regulated markets.
Enlabs, which was founded in 2005, is listed in Sweden but has its headquarters in Latvia, where it is the market leader for online gaming and sports betting. It is also among the five largest gambling companies in Estonia and Lithuania — both fast-growing gaming markets.
Entain said it expected the acquisition of Enlabs to be accretive to earnings in the first full year of ownership and that the Swedish company was expected to generate revenues of about £80m this year.
Mr Segev said that buying Enlabs was “perfectly aligned” with Entain’s strategy of expanding into new regulated markets and that the Swedish group was “already a strong and rapidly growing business in its own right”. Entain launched Bwin and Partypoker in the country in 2019.
The Enlabs offer comes amid of spate of dealmaking among gambling companies wanting to diversify away from mature markets, such as the UK and Germany, where lawmakers have begun to clamp down on betting.
Most have concentrated their efforts on the US, where there has been a surge in sports betting since a federal ban on the practice was overturned in 2018. At the same time, land-based US operators are looking to buy or partner with European companies that have online betting expertise.
MGM is expected to make a formal offer for Entain in the coming weeks, although no official disclosure has been made.
Analysts at the investment bank Jefferies considered a reasonable takeover valuation for Entain to be about £16.50 per share — roughly 20 per cent higher than the MGM proposal.
Along with the offer announcement, Entain also raised its profit guidance for the year for the third time since August after a surge in online gaming during lockdowns boosted betting activity.
It said it now expected earnings before interest, tax, amortisation and depreciation to be in the range of £825m to £845m, a 6 to 8 per cent increase on its previous forecast.
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