Under the agreement, Entain will pay an initial €300m (£257m/$313m) in cash at completion, with the deal also including deferred contingent consideration of up to €550m.
A balancing payment will be paid in early 2023 based on the actual performance of BetCity in the financial year 2022, with a further contingent payment due in early 2024 based on 10x BetCity’s EBITDA for the financial year 2023, less amounts already paid.
A final contingent payment of €50m will also be paid on delivery of synergies and successful migration to the Entain platform.
The total consideration payable on current expectations is €450m, though dependent on the performance of BetCity, the maximum consideration is capped at €850m. Entain said that it would fund the purchase with existing cash resources and its revolving credit facility.
BetCity secured an online sports betting and gaming licence from Dutch gambling regulator Kansspelautoriteit (KSA) in October 2021 and launched soon after when the country’s market opened in the same month.
Entain said BetCity’s offering would be highly complementary to its Bwin and Party brands, which are awaiting approval for a licence to operate in the Netherlands. This is expected later this year, with the KSA having requested additional documentation as part of the application process
Entain added the combination of BetCity’s local expertise, strong brand and diverse user-base, with Entain’s global scale and platform, would provide customers with a broader offering of products, content and experiences.
The acquisition is expected to complete during the second half of 2022.
“We are delighted that BetCity is joining Entain and are excited by the significant opportunities in the newly regulated Dutch market,” Entain chief executive Jette Nygaard-Andersen said.
“This acquisition will provide customers with an even better experience as we combine BetCity’s local expertise and brand alongside Entain’s market leading, customer focused platform. This transaction further underpins our growth strategy of operating in attractive regulated markets. We look forward to working with Melvin and the BetCity team.”
BetCity chief executive Melvin Bostelaar – who, along with other key members of the BetCity leadership team, would remain with the business should the deal go through – added: “We are happy to be joining forces with a world-class group in Entain. Together we will be well-placed to maintain a strong market position in the Dutch market for the coming years.
“Entain’s market leading platform, technology, established brands and global scale provides a fantastic opportunity to expand and enrich our customer offering.
“Both BetCity and Entain position the customer at the heart of everything we do, with Entain’s core values and philosophy in responsible gaming, compliance and company-culture seamlessly aligning with those of BetCity. We look forward to a bright future together.”