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

Jay DossetterNews

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 £174m1) 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 £44m1).  The business generated EBITDA of CAD18m (approximately £10.4m1) and profits before tax of CAD17.4 million (approximately £10.1m1) 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 £23.7m1).

The combination is expected to deliver approximately CAD15 million (approximately £8.7m1) 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
David Lloyd-Seed, Group Director of IR & Corporate Communications
Davina Hobbs, Head of Investor Relations
Callum Sims, Investor Relations Manager

investors@entaingroup.com
david.lloyd-seed@entaingroup.com
davina.hobbs@entaingroup.com
callum.sims@entaingroup.com

Media – Entain plc
Tessa Curtis, Head of Group PR & Media Relations
Jay Dossetter, Head of ESG and Press Office

media@entaingroup.com
tessa.curtis@entaingroup.com
jay.dossetter@entaingroup.com

Media – Powerscourt
Rob Greening / Nick Hayns

Tel: +44 (0) 20 7250 1446

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 be made by or on behalf of the Company or any of its affiliates or any of its Representatives in connection with the Company and any responsibility and liability whether arising in tort, contract or otherwise therefore is expressly disclaimed.