Poland’s leading sportsbook operator, STS, is set to be acquired by Entain CEE on the Warsaw Stock Exchange. Entain CEE will pay PLN24.80 per share, equating to an equity value of £750m and enterprise value of approximately £690m. The CEO of STS, Mateusz Juroszek, and his father, Zbigniew, own around 70% of the operator’s share capital and have accepted the offer. As part of the deal, the family foundations holding these stakes will reinvest a portion of the proceeds into Entain CEE, resulting in a 10% share in the business.
The CEO of Entain, Jette Nygaard-Andersen, described STS as an “outstanding” business and expressed excitement about the acquisition, stating that the Polish sports-betting market is highly promising and rapidly growing. The deal aligns with Entain’s strategy of acquiring high-quality businesses in attractive and regulated markets, particularly in central and eastern Europe. Entain aims to expand its presence in these regions and views STS as a valuable addition to its platform.
Entain plans to fund the acquisition through a joint venture with Emma Capital, which was established to drive its expansion in central and eastern Europe. With a 75% stake in Entain CEE, it will provide net cash consideration of around £450m. To raise additional funds, Entain intends to carry out an equity placement and separate retail offer to existing shareholders, aiming to generate £600m. The remaining £150m will be utilized for further near-term acquisitions.
The acquisition of STS marks an increased focus on eastern Europe for Entain, following its previous purchase of Croatia’s SuperSport. This deal allows Entain to enter Poland, the largest economy in the region, and acquire the leading brand in a market that generated $1.6bn in gross gaming revenue in 2022. The Polish gambling market is projected to grow by 12% over the next three years, with significant potential if online casino regulations are liberalized.
After the acquisition, Mateusz Juroszek will continue as CEO of STS and also join the board of Entain CEE to drive further growth in the region. The offer price of PLN24.80 per share represents a 35% premium on the six-month volume weighted average price and a 20% premium based on the spot price. With expected earnings before interest, tax, depreciation, and amortization of PLN333m for 2023, the price implies an 11x enterprise multiple, which reduces to 10x after accounting for synergies derived from the combination with SuperSport.
The acceptance threshold for Entain CEE’s offer is set at 50%, and with the Juroszeks committed to supporting the bid, their 70% stake ensures that the threshold will be met. The acquisition is subject to antitrust approval and is anticipated to be finalized in Q3 of 2023. Morgan Stanley is acting as the lead financial advisor to Entain for the acquisition, with Bank of America Securities and Santander serving as financial advisors. Clifford Chance and Freshfields Bruckhaus Derringer provide legal advice, while Ernst & Young offers input on tax and structuring. Oakvale Capital and White & Case act as the sole financial and legal advisors to STS and the Juroszek foundations.
