Rank makes €50m Spanish online bingo acquisition

Rank has acquired Spanish online bingo brand, YoBingo.es, for an initial purchase price of €21m, rising to a maximum of €52m based on FY18 EBITDA.

Rank said the purchase would accelerate its Spain-facing Enracha brand’s multi-channel strategy by providing the operator with a strong local brand.

YoBingo holds a local market share of 30% in bingo and over 5% in slots, and operates on an in-house technology platform.

The firm reported group revenues of €10.4m and EBIT of €2.5m for FY17.

“The acquisition of the YoBingo Group expands Rank’s digital footprint in Spain,” said Rank CEO John O’Reilly.

“Spain is an exciting high-growth regulated market which we believe offers strong multi-channel potential. The YoBingo Group is a well-established operation that we intend to further develop and to cross-sell into our established Spanish retail operations.”

According to a Regulus Partners analyst note published this morning, YoBingo’s technology will add “differentiation, localisation and flexibility as well as longer-term execution risk”.

“From a group perspective, [YoBingo] adds only c. 2% to total revenue (c. 10% to online), suggesting a different quantum or volume of deals is needed (alongside significant organic development) to be truly transformational, in our view,” the note added.

The operator appointed O’Reilly as group CEO in April following the departure of Henry Birch to online retailer Shop Direct.

Rank reported online revenue growth of 17% for the 13 weeks to 1 April 2018, although retail revenues for the period fell 2% year-on-year. Enracha’s online business was launched earlier this year.