GVC targets Iberian growth with €50m Portugal acquisition

GVC has agreed a deal to acquire Portuguese sports betting operator Bet.pt for an initial fee of €50m. Under the terms of the purchase, the London-listed operator will pay €50m upfront, with a further €10m to be paid within the next two years subject to certain conditions being met. In today’s Q3 analyst call, GVC CEO Shay Segev said the acquisition “ticked all the boxes” for GVC, fitting into its M&A strategy of bolt-on buys in regulated markets. The GVC chief said that while the acquired business is small, there was potential to double or even triple revenue growth during the next three years by leveraging GVC’s marketing capabilities and proprietary technology. Bet.pt’s sportsbook is currently powered by sports betting technology supplier SBTech, a business recently acquired by GVC’s US market competitor DraftKings. Segev said: “It fits very well to our strategy, in those types of deals where we have strong proven track record with a focus on regulated markets. Portugal still has growth in front of it and we can create further value. “There’s an exciting pipeline ahead of us. We’ve parked a lot of it due to the pandemic, but we’re still looking at bolt-on deals in new markets targeting new audiences,” he added. Bet.pt was one of the first operators to enter Portugal’s regulated market after obtaining a sports betting licence in 2016 and an online casino licence in 2017. According to GVC, the Portuguese sports betting and online gaming market has the potential to double in size to an estimated €450m (£408m) by 2023.

Regulus Partners analyst Paul Leyland said in a note that GVC’s estimates should be taken with a pinch of salt, although he admitted the deal was an “attractive bolt-on acquisition” in the expanding Portuguese market. Leyland wrote: “This represents a logical regulated market extension in its own right (notwithstanding high sportsbetting turnover taxes), but it is also an interesting move in terms of evolving supplier relationships. Bet.pt was one of SBTech’s flagship clients and will mean a material B2B loss to DraftKings. “A significant local position in [Portugal] might also prove valuable from a Brazil perspective and complement Betboo, albeit we also remain cautious on Brazil’s betting-only regulatory plans and the country’s capacity to mess up gambling licensing,” he added.