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  • “Game-Changer in the Gambling Industry: Italian Giant Lottomatica Snaps Up SKS365 for €639m”
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Italian gambling giant Lottomatica has agreed to acquire 100% of Malta-headquartered operator SKS365 at an enterprise value of €639m.

The deal, which is expected to close during H1 of 2024, will have a purchase price at closing equal to €625m excluding ticking fees, according to Lottomatica.

SKS365 is a major player in the Italian gambling market, operating brands including PlanetWin365 both online and across a retail network of 1,000 betting shops.

The company also operates its own payments division, PlanetPay365, and news portals Calcio.com and PlanetWin365.news.

Lottomatica’s acquisition of the business will put an end to a bidding war between Lottomatica, Flutter Entertainment and Playtech, according to reports in September.

The transaction will be funded by a combination of new debt and available cash, for which Lottomatica already has a €500m debt bridge facility in place.

Combined business synergies

SKS365 is one of the largest gambling brands in Italy, boasting around 600,000 registered users online and a market share of around 9.6% in sports betting and 6.4% in iGaming.

The business is expected to generate €300m in revenue and EBITDA of around €74m in the full-year 2023, with 70% coming from its online operations and 30% from retail.

When combined with Lottomatica’s 21.2% online gambling market share in Italy, the enlarged group is expected to boast a market share of around 28.3% – well ahead of its largest competitors Flutter Entertainment, with 20.1%, Playtech with 9.8% and Entain with 9.5%.

In the sports betting market across both online and retail, the enlarged group is expected to have an even larger market share of 34.7%, putting more distance between itself and its competitors, as Flutter holds 14.8%, Playtech 16.4% and Entain 13.2%.

The business combination is expected to deliver synergies of around €65m by 2027, consisting of €50m in opex synergies, €10m in capex and €5m in revenue synergies.

The transaction is expected to be EPS accretive by 2024, with double-digit EPS growth expected as a result of the deal by 2025.

The enterprise value of the deal, €639m, is the equivalent to 8.7x 2023 EBITDA pre-synergies, or 5.2x 2023 EBITDA post-synergies.

Management commentary

“We are excited to welcome to our group SKS365, a top performing player in the Italian gaming sector and led by one of the most respected management teams in the industry, under the leadership of Alexander Martin,” said Guglielmo Angelozzi, CEO of Lottomatica Group (pictured right).

“We add to our portfolio strong and complementary brands, PlanetWin365 and PlanetPay365, and we look forward to working with Alexander and the team, and we are committed to provide all the support needed in the next phase of growth, leveraging the combined capabilities of the enlarged group.”

SKS365 CEO Martin (pictured left) added: “At SKS365 we are proud to become part of the Lottomatica Group. We could not have found a better partner to continue our vision for SKS365 with the brands PlanetWin365 and PlanetPay365. 

“Many thanks to our shareholders, all employees and partners for developing under my leadership a highly successful omni-channel operator with a strong momentum in online sports betting and iGaming that is complementing our strong retail network.”

Lottomatica shareholders appear to have responded positively to the agreement, with shares up some 4% at the time of writing.

Elsewhere, Playtech – a rival bidder in this process – posted a statement to shareholders following Lottomatica’s acquisition announcement.

It said: “The group will continue to take a prudent and rational approach to evaluating selected acquisition opportunities in-line with its strategy to ensure appropriate exposure to attractive segments, both regionally and within product verticals.”

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