Entain sees more M&A, has balance sheet capacity

Entain executives say the company expects to continue to seek acquisition opportunities and has the balance sheet strength to do so.

CEO Jette Nygaard-Andersen told a conference call with analysts that although high interest rates aren’t helpful, they won’t prohibit further M&A.

“And in the current environment I would say it might even open up new doors for us and new opportunities where we are looking at things where others are pulling back,” she said. “So really our M&A strategy is unchanged here, we start with the strategic fit, the importance to the business, look at the business on its merits and then of course we look at the financing in the current environment.”

Chief Financial Officer Rob Wood added that the group has the balance sheet strength to pursue further acquisitions.

Acquisition synergies

“I think the important point with M&A is to remember the returns that we generate through M&A are so compelling typically because synergies are such a large portion of existing EBITDA that we’re buying,” he said. “What that means is that whilst rising interest rates are unhelpful to the model,  they just mean the returns slightly lower than they would otherwise be.”

Entain in February announced it was boosting its Canadian presence, through the acquisition of Avid Gaming, which owns sports betting brand, Sports Interaction.

It also bought BetCity in the Netherlands and Croatian market leader SuperSport to expand in Eastern Europe.

Entain’s conference call followed its 3Q22 trading update. It reported that net gaming revenue overall was up 2 percent, though was flat in constant currency terms. Online NGR was up 1 percent, while retail NGR grew 10 percent.

The company said its BetMGM venture in the U.S. now has a 23 percent market share and the group is on track for full year NGR of more than $1.3 billion. It said it expects to reach sustainable positive EBITDA next year. 

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