Entain Contemplating Selling Crystalbet Following Strategic Review
Entain may sell its Georgia-facing Crystalbet brand after a strategic review determined that the operation is “non-core” to the group, with several parties already showing interest.
Entain announces the potential sale of Crystalbet following a strategic review.
LISTEN TO THIS ARTICLE:The review, initiated by Entain’s Capital Allocation Committee in January, aimed to maximize shareholder value and reflect the company's operational progress.
Speculation about potential brand sales grew in March when the Financial Times reported that Entain had hired Wall Street firm Moelis to advise on asset sales. This news followed Entain’s announcement of a net loss of £936.5 million for the 2023 fiscal year.
The Committee highlighted several key findings in the review. Among these was the consideration of “strategic alternatives” for Crystalbet, which Entain’s predecessor GVC partly acquired in 2018, with Entain buying the remaining 49% in 2021.
The Committee concluded that the brand is non-core to the group. As such, strategic alternatives for this business will be considered, including interest already received from potential acquirers.
Other Findings from the Entain Review
Besides the potential sale of Crystalbet, the Committee noted that Entain has an “appropriate” portfolio of diversified strategic assets, brands, capabilities, and geographic presence to ensure long-term growth.
The Committee also emphasized Entain’s future potential, citing a “significant upside” in focusing on organic revenue growth, expanding margins, and success in the US. They described the group’s balance sheet and leverage position as “robust,” bolstered by extending a revolving credit facility and repricing term loans.
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Reviewing Progress in Key Markets
The review included an analysis of Entain’s progress in key markets. The company expects to return to growth in the UK later this year, despite the new voluntary industry code on player safer gambling checks and a £2 online slot limit starting in September.
In Europe, Entain CEE (Central and Eastern Europe) is performing well, with promising signs for online casino liberalization in Poland. In the US, the product roadmap for BetMGM is advancing, with new markets launched for Major League Baseball and the National Basketball Association. Additionally, Entain recently received approval from the Nevada Gaming Commission for a full license in the state.
Entain is also experiencing strong double-digit revenue growth in Brazil in Q2, driven by improved customer acquisition and retention efforts. The Committee praised the impact of Project Romer, which aims to achieve an online EBITDA margin of 28% by 2026 and 30% by 2028. This involves simplifying the group to enhance operational leverage and achieve cost savings of £100 million by 2025.
Chair Barry Gibson expressed satisfaction with the group’s progress but acknowledged that more work is needed to improve overall performance. Gibson said, “Whilst we still have more work to do to improve our operational performance, the board is pleased with the progress Entain is making so far in 2024 in line with our strategy.”
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