Sazka Group targets international expansion with €500m cash injection from Apollo

Czech lottery operator Sazka Group has agreed a €500m (£447m) bumper investment deal with international private equity firm Apollo Global Management. The investment will be made into a new company, Sazka Entertainment AG, a newly established wholly owned subsidiary of private investment group KKCG AG, which is operated by Czech billionaire Karel Komárek. Komárek, the current chairman of Sazka Group, is a major shareholder in the business and one of the richest men in the Czech Republic, having amassed a $3bn (£2.2bn) fortune through oil and gas. Under the terms of the investment, KKCG AG will become the 100% owner of Sazka Group upon completion, which is expected to take place in 2021. “The majority of Apollo’s €500m investment will be used to capitalise on acquisition and growth opportunities in Europe and North America, with a focus on lotteries,” Sazka Group confirmed. The deal values the Sazka Entertainment AG business at €4.2bn (£3.7bn), with JP Morgan and Clifford Chance LLP acting as financial and legal advisers to the firm. Addressing the multi-million-euro investment, Komárek revealed Sazka had held “a series of discussions” with several major international investment funds before concluding its deal with Apollo. “Our business is entering a new era and this investment and strategic partnership will support our long-term expansion plans,” said Komárek. “I believe the interest in Sazka Group from one of the world’s leading investors in gaming confirms the value and strategy of Sazka Group and is an endorsement of the excellent work of the entire Sazka Group management team. “In partnership with a strong US investor, Sazka Group is well positioned to expand in Europe, the US and other potential regions, continuing to focus on lottery and complementary gaming verticals. “I am convinced that the gaming industry is one of the most promising sectors for the future and Sazka Group aspires to be a global player in this sphere. I have absolute confidence that with support from Apollo, my team will take the business to the next level,” Komárek concluded. Sazka Group is one of the largest pan-European lottery operators, with operations in the Czech Republic, Greece, Austria, Italy and Cyprus. The business is a controlling shareholder in Greek lottery and betting operator OPAP. Earlier this month, the firm recruited London 2012 Olympic mastermind Sir Keith Mills to lead its bid for the exclusive UK National Lottery licence contract, having previously entered the fourth licence contest. Apollo Global Management bid to acquire UK bookmaker William Hill in September, but was later rebuffed in its advances, with Hills preferring to endorse a rival bid from US casino giant Caesars Entertainment. Apollo, which is rumoured to be readying a second bid for Hills’ non-US assets, manages $433.1bn in international assets and, according to its latest financial report, has $45.8bn in so-called “dry powder” funds available for investments across the world.   Picture credit: Sazka Group