Feb 8: Entain strikes an Avid deal

Entain buys Avid, Aristocrat debt rating, Everi ecash acquisition, Maryland Jan22 +More

Earnings+More

Feb 08, 2022

Good morning. Here’s the line-up:

Entain acquires owner of Sports Interaction for C$300m.
Aristocrat gets a thumbs-up from the debt analysts at Fitch.
Everi buys ecash for A$33m.

If you ain’t got this, you can get it here:

Entain acquires Avid

Entain will pay C$300m (£174m) for Avid Gaming.
The Canadian-facing Sports Interaction brand generated C$76m in revenue (40% up YoY) and EBITDA of C$18m.
The deal represents a multiple of 7x prospective 2023 EBITDA. Entain is targeting cost synergies of C$15m.

Driving the news: Entain’s buyout of Avid gives it a prime brand from the Canadian grey market, adding to its existing position with both bwin and the PartyGaming brands. The move comes two months ahead of the opening of the regulated market in Ontario.

Entain said Sports Interaction would be “highly complementary” to its existing Canadian business.

The Avid chain of command: Avid is owned by Middlebrook Investments. It exclusively licenses the Kahnawake-licensed Sports Interaction to the Mohawk Council of Kahnawake and Mohawk Online. It operates the brand in Canada. Entain said it would continue supporting the socioeconomic efforts of the Mohawks including online revenues being reinvested into the community.

What they say:

Will Golby, CEO of Avid Gaming: “Entain 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.”

Grey to white: Sports Interaction will join the rest of the grey market operators taking the journey from grey to white (in Ontario at least). The presumed previous market leader Betway (owned by Super Group) has also indicated it will be aiming for Ontario’s April launch.

Conservative estimates: Analysts at Regulus Partners said Sports Interaction is the “strongest” visible Canadian brand and said the CY23 multiple looks “conservative (and) highly attractive”.

Regulus Partners: “An ongoing connection to the Mohawk Tribe is also likely to substantially improve Entain’s voice on the ground and abilities to further localize the offer vs. the decidedly offshore bwin and Party products currently serving the market.”

Strategic move: Berenberg analysts said the deal is “very much in line with Entain’s inorganic growth strategy”, while the team at Davy said it was “interesting”.

Davy analysts: “While it adds no more than a single-digit percentage to existing group EBITDA, it materially expands the size of its Canada business where it now owns a leading domestic sports betting brand, operational in the market for decades.”

Fun fact: the Kahnawake reservation is located in… Quebec.

Aristocrat debt rating

What next for Jilted John? In the wake of the Playtech bid failure, Fitch Ratings have reaffirmed Aristocrat's BBB rating on its long-term debt and suggest they expect the company to continue to pursue strategic M&A, particularly in real-money gaming. The Fitch team noted that Aristocrat will be able to use the cash from A$1.3bn equity raise earmarked for the Playtech deal. They expect Aristocrat revenues to fully recover its pre-pandemic revenue levels this year.

Everi-ecash buyout

Paid in full: Everi is set to acquire ecash Holdings, the Australia-based developer and provider of cash handling and financial payment solutions, for A$33m ($23.4m). The acquisition represents a strategic extension of Everi's current suite of FinTech solutions. The deal will be paid out in cash and includes an additional payment of A$10m ($7.1m) if certain growth targets are met. It is expected to close within 60 days.

Accelerated entry: Jefferies was supportive of the deal and said it would be “immediately accretive” and would “accelerate” Everi’s entry into the Australian market. They noted that Everi’s acquisition of Australian games developer Atlas Gaming in early Jan22 will also combine with ecash for a “bolstered presence” in the Australian market.

Datalines

Maryland Jan22: GGR was up 12.2% vs. Jan19 and up 19.4% YoY to $153.8m. On a sequential basis, it was down 11.1%. MGM’s National Harbor led GGR charts with $67.1m (43.6% market share), Maryland Live! was second with $54.6m GGR (35.5%) and Caesars Horseshoe Baltimore was third with $16.1m in GGR (10.5%).

Ohio Jan22: Casino and racino GGR was up 21.7% vs. Jan19, but -13% MoM to $171.2m, with Jan22 enjoying nine weekend days vs. eight in 2019 and 10 in 2021. Penn National’s four properties in the state generated $59.9m in GGR, a 22.2% rise vs. Jan19 and -12.3% MoM. Boyd Gaming’s Belterra Park recorded $6.5m in GGR, +6.9% vs. Jan19 and -19.3% MoM and Caesars’ Scioto Downs generated $17.3m in GGR, up 35.0% vs. Jan19 and -9% MoM.

Newslines

Follow the guru: Games development studio Blue Guru Games has signed a partnership with Bragg Gaming to provide it with a range of unique content aimed at European online casino markets. The agreement is part of Oryx’s Blue Horn distribution program.

Clear retail: FanDuel has opened a retail sportsbook at the Suquamish Clearwater Casino Resort in Washington State. The new betting outlet is part of a deal FanDuel has signed with Madison Enterprises, the Suquamish Tribe’s business division.

Feed the habit: Single-player fantasy operator PrizePicks will be a content sponsor of the Tour Junkies, a podcast for golf betting and daily fantasy analysis. PrizePicks will have a dedicated segment on the weekly show and access to all its media assets.

Live and direct: Evolution and FanDuel have extended their previous agreement which makes Evolution the leading U.S. operator’s sole live dealer table games provider. The renewal represents an enhancement of an agreement from 2020. Work is already underway to create FanDuel-branded live casino environments in Evolution’s Michigan and Pennsylvania studios to be launched in the coming months.

Video reach: Spotlight Sports Group has renewed its agreement with Betfair to produce its Racing Post Live show. The two groups first partnered to produce the show in 2020 and will continue providing viewers with live reactions and tips throughout the racing season. The content will cover all key UK races and major festivals in both the UK and Ireland.