Betting giant Entain set to snap up Swedish gaming firm Enlabs for £250 million
Entain have revealed they are set to buy Swedish-based gambling operator Enlabs for £250 million, just a few days after rejecting an £8.1 billion takeover approach from US casino giant MGM Resorts.
The parent company of Ladbrokes and Coral also released a short trading update in which they raised their earnings forecast for 2020 after a strong end to the year.
Enlabs is a mainly online sports betting and gaming operator in the Baltic region with a small retail presence. Entain said the acquisition was part of their growth strategy of entering regulated markets where they do not already have a presence.
"The acquisition of Enlabs is perfectly aligned with our strategy of expanding across new regulated international markets," chief executive Shay Segev said.
"We are hugely excited by the growth opportunities it presents both in its existing markets and through new market opportunities.
"Enlabs is already a strong and rapidly growing business in their own right, but we now have a fantastic opportunity to turbocharge their growth by leveraging the power of our unparalleled proprietary technology, scale, product and marketing expertise."
Entain are set to announce more details of trading in 2020 later this month but revealed on Thursday strong performance in the final quarter of last year meant their ebitda (earnings before interest, taxation, depreciation and amortisation) for the full year was now expected to be in the region of £825m to £845m despite the effect of Covid-19 lockdowns on retail betting, representing an increase of six to eight per cent on previous guidance.
On Monday, Entain confirmed they had received a takeover proposal from MGM, their partner in the US market, but had said the offer undervalued the company.
David Brohan, gaming and leisure analyst with stockbrokers Goodbody, said Thursday's announcement was a "very positive update from Entain".
He added: "The bolt-on deal and current trading are both strong positives for the Entain investment case, and both increase the pressure on MGM to up their proposal in our view."
Entain's share price was up 9p at 1,469p on Thursday morning.
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