Entain confirms interest from "potential acquirers" of Crystalbet

Entain has put Crystalbet up for sale following a strategic review conducted by the operator’s Captial Allocation Committe (CapCo).

The strategic review, which began in January of this year, has finally reached a conclusion as Entain revealed that Crystalbet, Georgia’s “leading gaming brand”, has been deemed “non-core” to the business.

The group’s update, issued today, 21 May, made clear that interest in the Tbilisi-based firm has “already been received from potential acquirers”.

Entain first acquired a 51% stake in Crystalbet six years ago, before snapping up the remaining 49% of the company three years later, in 2021. 

The regulated Georgian market accounted for 3% of the group’s net gaming revenue (NGR) last year, Entain revealed in its full-year 2023 results presentation, published in March. That was up 7% year on year (YoY).

Crystalbet’s main rival in the country is Adjarabet, a brand acquired by Flutter Entertainment (then Paddy Power Betfair) in early 2019, while Betsson has a solid foothold in Georgia with 200 employees based there.

With Entain shares down 50% over the past year, meaning its market cap is now under £5bn, the company has faced investor backlash over the tanking stock, as well as its M&A strategy over the past couple of years.

There were media reports earlier this year that Entain, which owns more than two-dozen brands, was looking to offload partypoker as part of a drive to focus on core assets.

The Financial Times reported in March how the operator had hired Wall Street firm Moelis to assist with selling businesses that aren’t using the company’s tech stack, with the newspaper saying that BetCity, Ladbrokes Australia, Enlabs in Sweden and Crystalbet were in the mix.

CapCo’s strategic review determined that overall, Entain has the “appropriate portfolio of diversified strategic assets, brands, capabilities and geographic footprint” to ensure it is “well positioned to deliver high quality, long term growth”.

Meanwhile, Entain’s balance sheet and leverage position is “robust” and there remains “significant upside by focusing on delivery of the group’s strategy of returning organic revenue growth, expanding margins and winning in the US”.

Other core focuses for the business will be on Brazil, after bosses reported a return to double-digit revenue growth in Q1, while Entain Central and Eastern Europe (CEE) is “performing well and the outlook for online casino liberalisation in Poland is increasingly encouraging”.

Entain chairman Barry Gibson admitted that while there are still issues to address, the group is heading in the right direction.

“I am delighted that the Capital Allocation Committee has concluded its strategic review of our portfolio,” he remarked. 

“Whilst we still have more work to do to improve our operational performance, the board is pleased with the progress Entain is making so far in 2024 in line with our strategy. 

“The group has the core strengths, brands and products to be competitive across its markets and continues to be a global leader in betting and gaming. The board looks forward to updating the market further on its progress at the interim results in August.”

Entain is yet to announce a replacement for Jette Nygaard-Andersen, who stepped down last December, but last month explained that the “search for a permanent CEO is ongoing and is progressing well”.

Entain added the CapCo will continue to review the company’s strategic process and “consider options to maximise shareholder value, including ongoing oversight of all significant aspects of capital commitments”.