Betsson acquires Betsafe in 60m deal
Swedish company expects acqusition - worth up to 60m - to help strengthen its position in the Nordic region.
Betsson has acquired fellow Nordic operator Betsafe in a deal valuing the company at up to 60m (£52.2m).
“This deal will fuel our growth,” said Betsson chief executive Pontus Lindwall (pictured). “We strengthen our position in the Nordic region as well as our organisation when merging two profitable companies, each of which has proven its ability to gain market share in a highly competitive market environment.”
Betsson will pay an initial 32.5m in cash and shares for the privately owned operator, with a further 27.5m payable conditional on “the development of the acquisition and the integration thereof during 2011,” said the Stockholm-listed company in a statement this morning. The full additional purchase price becoming payable would equate to a multiple of approximately 5-6 times Betsafe’s EBIT for 2011.
Betsafe increased revenues 119% to 25.9 in 2010, with revenues amounting to 33.4m and an operating profit (EBIT) of 6.9m for the period 1 May 2010 to 30 April 2011.
The two companies both hold Malta operating licences and sit on the Ongame poker network, with Betsson stating its belief that: “[I]n addition to incremental earnings”¦ it will benefit from synergies that will materialise as the result of the integration of platforms and supplier contracts.”
Betsson however said it intended to retain all Betsafe staff and brands, with the management of Betsafe, including founders André and Christer Lavold and chief executive Henrik Persson, joining the Betsson operational management team in Malta. Persson called the deal “an attractive solution for Betsafe”, given the similar business visions of the two companies.
“Two strong cultures, with common values and goals, now join forces with the aim to further develop the business and eventually become one of the largest and most profitable players in the market”, said Persson.
In March Betsafe became the first private egaming operator to sign a sponsorship deal with the Danish football league, ahead of the market opening there. This is now unlikely to occur until 2012 due to a complaint by land-based gaming industries over being taxed at a higher rate than that being proposed for egaming.