DAVY VIEW

Entain has announced that its Entain CEE joint venture is launching an offer to acquire the leading sports-betting operator in Poland, STS Holdings, for a total consideration of £750m (enterprise value £690m). The net cash consideration payable by Entain will be approximately £450m, and it is raising £600m of equity via a placing to finance. The CEO of STS, Mateusz Juroszek, will join the Board of Entain CEE and will stay on as STS CEO. Overall, the acquisition multiple looks relatively full (13.8x FY22 EBITDA), particularly in the context of Entain’s (ex-BetMGM) valuation. However, on the more positive side, it is acquiring a number-one sports operator (c.40% share) in an attractive market in a sector where scale is essential. Management also appears to be relatively confident that there will be liberalisation of the Polish casino market, which could drive additional profitability.