Ladbrokes Owner Entain to Acquire Swedish Gambling Firm Enlabs for £250 million
Entain, a leading British sports betting and online gambling company, has announced its plans to acquire Enlabs, a prominent Swedish online gaming firm for £250 million. This exciting news comes on the heels of Entain’s impressive performance in the previous year. Just last week, the company rejected an £8.09 billion offer from US casino giant MGM Resorts.
The acquisition of Enlabs AB is expected to strengthen Entain’s presence in the rapidly growing Baltic and Nordic markets. The deal will be financed with Entain’s existing cash reserves and each share of Enlabs will be acquired for 40 Swedish Kronas.
CEO Shay Segev stated, “This acquisition perfectly aligns with our expansion strategies as we aim to enter emerging international markets.” This move follows Entain’s rejection of MGM Resorts’ offer for the second time, citing undervaluation of their company.
The positive impact of this merger is already evident in the stock market, with Enlabs trading at a 1.8% increase and Entain also seeing a slight rise in prices.
The Benefits of Acquiring Enlabs
Niklas Braathen, President of Enlab’s President, will continue to lead the company and help expand its reach in emerging markets. Braathen expressed excitement about this opportunity stating, “When Entain proposed acquiring us, we immediately recognized its strategic importance.” He added that their interactions with the Entain team have only strengthened their belief that this is the perfect partnership for their brand, employees, and clients.
Entain is expecting a significant increase in earnings before interest, depreciation, tax, and payback for 2020. The company had previously projected a revenue of £770 million to £790 million for the year but now expects to exceed that with a range of £825 million to £845 million. This impressive performance is despite the challenges posed by the pandemic and subsequent lockdowns on retail businesses.
MGM Resorts’ Undervaluation of Entain
Entain believes that MGM Resorts has undervalued their operations with its bidding amount in light of the expected growth in the US gambling industry. With the historic Supreme Court decision overturning PASPA, many see the US as the next major market for growth in this industry.
While MGM proposed a takeover at 1,383 pence per share, Entain’s current value stands at 1,455 pence per share – an increase of almost 28%. Entain plans to continue expanding quickly through both acquisitions and organic growth strategies.