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Lottomatica completes SKS365 acquisition

| By Robert Fletcher
Lottomatica Group has announced that its GBO SpA subsidiary has completed the acquisition of Italian-facing operator SKS365 Malta Holdings.

The deal, agreed in November 2023, places an enterprise value on the business of €639m (£548m/$685m). Lottomatica says the agreement covers 100% of SKS365 Malta’s share capital.

At the time, Lottomatica said the purchase strengthens its position in the Italian market. It also said the deal will expand its brand portfolio and accelerate its growth profile.

SKS365 has a significant online presence, counting PlanetWin365 and PlanetPay365 among its core brands. An omnichannel operator, it also runs approximately 1,000 retail sports betting points.

Speaking last year, Lottomatica CEO Guglielmo Angelozzi said these brands would be “highly valuable and complementary” to the group’s portfolio. He added Lottomatica would support SKS365 in its next phase of growth.

“We add highly valuable and complementary brands to our portfolio,” Angelozzi said. “We will provide all the necessary support for the next phase of growth by leveraging the skills of the enlarged group.”

Confirming completion, Lottomatica said it will now provide an update of FY2024 guidance incorporating the expected results of SKS365. This will be done as soon as practicable.

Lottomatica is financing the purchase with a combination of available cash and additional debt.

Martin exits as CEO of SKS365

Following confirmation of the acquisition, Alexander Martin has announced he is stepping down as CEO of SKS365.

In a post on his LinkedIn page, he said it had been an “honour” to lead the business. Martin took on the role of CEO in December 2019.

“Due to the inherent changes to my role, I will be stepping down as CEO of the company,” Martin said. “It has been my great honour to lead SKS365 since 2019. Together, we have built an excellent and successful company. Our consistently growing financial results have been evidence of our unwavering commitment to excellence and resulting in new heights yearly.

“For the future, I wish all SKS365 employees the very best as you continue your journey with the Lottomatica Group. Being part of the group provides a robust platform for SKS365, offering an excellent foundation for sustained growth and continued success for our company.”

Playtech falls short in the race for SKS365

Lottomatica saw off competition from industry giant Playtech to finalise the acquisition of SKS365.

Playtech in September last year revealed it had opened talks over a potential deal for the operator. Media reports at the time also suggested Flutter had lodged a bid, but this was never confirmed. Offers were believed to have been in the region of £500m to £600m. 

At the time, Playtech acknowledged interest from other parties but did not reference their identities. It added that there was no certainty it would be successful in its efforts to acquire SKS365 – something that ultimately proved the case.

Positive 2023 for Lottomatica

The deal comes after Lottomatica in February reported revenue of €1.63bn for its 2023 financial year, up by 17.0%. This, it says, “exceeded expectations” set by its initial public offering (IPO).

The company announced an IPO on the Euronext Milan exchange in April. Here, the price range was set between €9 and €11, leading to a market capitalisation of €2.67bn.

This IPO has had a lasting effect on Lottomatica’s earnings. In its third quarter 2023 results, it reported €2.8bn in gross gambling revenue (GGR). Positive results for the full-year followed up on this initial success.

Other financial highlights from 2023 include adjusted EBITDA rising 16.6% or €580.4m on a pro-forma basis. However, higher expenses meant net profit for the year totalled €74.2m, down from €78.4m.

Looking to 2024, Lottomatica initially said it expects revenue of between €1.80bn and €1.84bn. Adjusted EBITDA is projected to be between €625m and €645m, with an estimated 53.0% generated by the online segment.

However, this is now set to change following the completion of the SKS365 deal.

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