M&A

Esports Entertainment Group to acquire Bethard

| By Daniel O'Boyle
Esports Entertainment Group has agreed to acquire Swedish gaming business Bethard in a deal worth approximately $27m (£19.1m/€22.1m).
Zlatan Ibrahimovic

The operator will pay €16m up front, plus an earn-out based on 12% of Bethard’s net gaming revenue for each of the next two years.

As Bethard generated net gaming revenue of $31m in 2020, this would suggest an overall purchase price of roughly $27m, if Bethard’s revenue remains level.

The deal is expected to close on 1 July, 2021, the first day of Esports Entertainment’s 2021-22 fiscal year.

As a result of the deal, the operator has raised its revenue guidance for that year from $100m to $105m.

Bethard is licensed in both Sweden and Spain and Grant Johnson, chief executive of Esports Entertainment Group, said these two licences – particularly the former – would play an important part in his business’ continued growth.

“This is another great addition for Esports Entertainment Group that substantially increases our revenues, and available markets,” Johnson said. “With this transaction, we expect to gain two new gaming licenses, including one in the strategically important Swedish market. 

“At the completion of the license handover we will have six tier one licenses.”

Bethard is currently owned by Gameday Group plc. However, Swedish newspaper Aftonbladet reported last month that football star – and Bethard brand ambassador – Zlatan Ibrahimovic is a part-owner of the operator. This ownership interest would be in breach of the Code of Ethics set out by the sport’s global governing body Fifa and European football’s governing body Uefa launched an investigation into the links last month.

Esports Entertainment Group has made a number of major acquisitions in the past year. These include acquiring Lucky Dino Gaming Limited – operator of Lucky Dino, Olaspill, Kalevala Kasino and Casino Jefe – in March of this year in a deal worth around $30m and SportNation and RedZone operator Argyll Entertainment in 2020.

Last week, the Group published its financial results for the third quarter of its financial year – the three months ending March 31, 2021 – showing total revenue of $5.4m for the period, after not generating revenue in the corresponding quarter of 2020. The business made a net loss of $12.4m for the quarter, up from a $6.3m net loss for the same period in 2020.

Esports Entertainment Group also announced this week that its New Jersey GMBL subsidiary had been approved for a licence in the US state, the first in which the business will launch. It now awaits a transactional waiver in order to go live.

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