January 8, 2021
British sports betting and online gambling conglomerate Entain is looking forward to acquiring Enlabs, a Swedish online gambling firm for £250 million after posting a strong finish to the previous year. The news comes days after the Ladbrokes owner, which also owns Bwin and Coral, rejected an £8.09 billion offer posted by US casino conglomerate MGM Resorts.
Entain, which recently changed its moniker from GVC Holdings, believes the decision to buy Enlabs AB will help boost its presence in the quickly developing Baltic and Nordic markets. Entain hopes to acquire Enlabs for 40 Swedish Kronas per share and the deal will be financed from the company’s existing cash reserves.
Entain’s Chief Executive Officer, Shay Segev said, “Acquiring Enlabs perfectly aligns with our ambitions and expansion strategies as we plan on venturing into emerging and unregulated international markets shortly”. Entain snubbed MGM Resorts’ offer for the second time last week, claiming the latter was grossly undermining its value.
The merger is evident at the stock market too as Enlabs, which also owns NinjaCasino and Optibet, was trading at 1.8% higher than its usual price while Entain’s prices were also marginally higher.
“We are extremely excited about the new growth opportunities the acquisition presents, both in new and existing markets. Enlabs is a rapidly growing business in its own right, and we now have an excellent opportunity to further boost that growth by leveraging our product marketing expertise, unparalleled proprietary technology, and scale”, Segev explained.
Niklas Braathen, Enlab’s President, will continue to lead the firm from the front and help expand the brand in the emerging markets. “When Entain proposed to acquire Enlabs, we instantly recognized the strategic importance”, Braathen said. “Our interaction with the team so far has only reaffirmed our faith that Entain is the ideal home for the brand, its employees, and clients” he added.
Entain hopes to deliver earnings before interest, depreciation, tax, and payback of between £825 million and £845 million for 2020. The company had previously posted an expected revenue of between £770 million and £790 million for the year. The company believes the improvement arrived on the backs of robust performance in the final quarter, despite the implications of the pandemic and the subsequent lockdown on retail businesses.
According to previous reports, Entain believes MGM Resorts undervalued its operations with the bidding amount in the wake of the expected boom in the US gambling industry. The US is widely regarded as the next venue for a major growth spurt, following the historic Supreme Court decision overruling PASPA.
While MGM proposed a takeover at 1,383 pence per share, Entain’s is currently valued at 1,455 pence a share, an increase of almost 28%. Entain now plans to dominate the market with quick expansions apart from a series of acquisitions.
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