GVC rules nothing out as it plots M&A moves
Chief executive Kenneth Alexander says GVC is actively pursuing acquisition opportunities with regulated markets a big priority
GVC Holdings chief executive Kenneth Alexander (pictured) said he would “rule nothing out in terms of M&A” after the operator placed acquisitions and bolt-ons at the heart of the company’s growth strategy, in an exclusive interview with eGaming Review.
The firm is said to have taken a look at UK-facing Stan James, although found the asking price to be too big a hurdle, while it has also been linked with a move for bwin.party along with William Hill, in a similar move that saw the two firms pull-off a joint-deal for Sportingbet around two years ago.
And speaking to eGaming Review after GVC yesterday announced a 28% increase in EBITDA and 32% rise in net gaming revenues, Alexander said the company was in the process of scouring the market for the right opportunities.
“And as we’ve said in the past, we own all of our own sportsbook technology, we’ve got the infrastructure, we’ve got a track record and we are keen to explore various opportunities in terms of M&A so we are actively looking,” he added.
Earlier this year the firm took City analysts somewhat by surprise when in a change of strategy it indicated it would like to increase its exposure in the recently re-regulated UK market via potential bolt-on opportunities.
“Everybody presumes we are just looking at unregulated markets,” Alexander said. “With PoC and the infrastructure we’ve got the UK is potentially an interesting market but I wouldn’t rule out anything quite frankly in terms of M&A,” he added.
In its results, GVC said the rest of the year would be focused on completing “accretive” acquisitions.
“In 2015, it is the intention that GVC will continue to build on its exceptional record of integrating strategic acquisitions and the focus will be on increasing the diversification of our revenues by targeting accretive acquisition in regulated markets,” the results statement read.
“However, should the right opportunity arise, we would also consider acquisition opportunities in unregulated markets,” it added.
Much of GVC’s recent growth has been attributed to the March 2013 purchase and rapid turnaround of the then loss-making Sportingbet business, an acquisition the firm said it was keen to replicate with similarly struggling businesses.
GVC finance director Richard Cooper told eGR its proprietary technology was integral to it being able to make strategic acquisitions where the “marginal costs of bolting on revenue is tiny”.
“Infrastructure is the key here because we’ve got our own proprietary sportsbook, we’ve got our own trading team, we’ve got our own mobile platform, we’ve got our own payments engine, and we are running 20-plus markets off that,” Cooper said.
“As such, those slightly weaker companies in the UK that can’t shoulder that product robustness, that’s obviously where we would like to be looking at,” he added.
Alexander and Cooper also brushed aside fears GVC’s Germany-facing Casino Club brand would be heavily impacted by the recent alteration to how VAT is calculated in the country.
The pair said Casino Club remained profit making and integral part of the overall group with the VAT payments coming in under what it expects to pay towards the recently introduced UK Point of Consumption tax.