Betclic set to go public in €7.2bn SPAC merger

FL Entertainment, the parent company of Betclic, is poised to float as part of a SPAC deal with Pegasus Entrepreneurial Acquisition Company.

The merger, which creates a pro-forma enterprise value of €7.2bn (£6.2bn), will see the new company list on the Euronext Amsterdam in what will be the largest combination by a European-listed SPAC.

FL Entertainment also owns content production company Banijay Group, which has produced TV shows such as Peaky Blinders and MasterChef.

Banijay Group is by far the largest contributor to the SPAC, having reported 2021 revenue of €2.8bn and EBITDA of €433m, compared to Betclic’s €741m and €177m, respectively.

Betclic grew revenue by 64% during the pandemic and also posted a 2021 cash flow of €162m. The operator also boasts a proprietary tech platform.

In total, the parent company generated revenues of approximately €3.5bn and adjusted EBITDA of around €609m during 2021.

More than €620m in cash commitments to FL Entertainment has already been secured ahead of the IPO.

Of this total, around €220m comes from PIPE (private investment in public equity) investments and €250m from FL Entertainment controlling shareholder Financière Lov.

An additional €50m has been invested by Pegasus Entrepreneurial founders Financière Agache and Tikehau Capital as part of a forward purchase agreement, with a further €100m from Pegasus Entrepreneurs secured through signed non-redemption commitments.

It is understood the parties concerned have committed to a PIPE investment target size of €250m amid strong demand from investors.

The initial free float of stock is expected to represent around 10% of the company, worth roughly €400m.

Financière Lov is expected to hold 46% of shares in the company, while four minority shareholders across Banijay and Betclic are set to own a combined 41% share.

The newly combined company will go under the name FL Entertainment and will be led by current FL Entertainment chair Stéphane Courbit in the same role.

Nicolas Béraud, current CEO of Betclic, will retain his position, as will FL Entertainment CEO François Riahi and Banijay CEO Marco Bassetti.

FL Entertainment said that in the medium-term, it anticipated annual organic revenue growth in the low teens for Betclic.

Licensed in France, Italy, Portugal and Poland (France accounts for an estimated two-thirds of group revenue), Betclic has amassed 11 million registered players and employs more than 800 people across five offices in Europe. Bet-at-home is a sister brand as part of the Betclic Everest Group.

The proposed transaction has been unanimously approved by the FL Entertainment and Pegasus Entrepreneurs board, with the deal expected to close on 30 June, with a subsequent listing on 1 July.

FL Entertainment chair Stéphane Courbit welcomed the SPAC deal as a watershed moment.

“Achieving a public listing of FL Entertainment through this partnership with Pegasus Entrepreneurs is a milestone in the history of our group. As a result of the transaction, the group will benefit from a robust balance sheet and will be very well positioned to capture growth in the entertainment industry,” Courbit added.

Pierre Cuilleret, Pegasus Entrepreneurs CEO, added: “We could not dream of a better opportunity than partnering with FL Entertainment and Stéphane Courbit to achieve our objective on behalf of our shareholders.

In a note published this morning, Regulus Partners said that the timing of the SPAC could prove incredibly beneficial for Betclic, and that future M&A would improve its standing further.

“Betclic has chosen a good time to SPAC. French and Portuguese markets have shown very strong adoption growth during Covid, while the highly restrictive markets of Germany and Poland provide an underpin of share as well as segment growth.

“The acquisition of a strong omnichannel operator and/or an online business with proven competitive capabilities would round out the business and mitigate these risks nicely and the combination has the scale to achieve this,” Regulus added.