Entain strengthens Canadian market prospects with C$300m purchase of Avid Gaming and B2C brand Sports Interaction
Entain has acquired Avid Gaming for C$300m (£174m) from Middlebrook Investments Limited as it gears up to compete in Canada’s regulated sports betting and iGaming market.
Avid Gaming owns Sports Interaction, a leading online betting brand in the country, which is currently run by Mohawk Online, a digital subsidiary of the Mohawk Council of Kahnawà:ke and part of the Mohawk Online socioeconomic initiative.
Sports Interaction is headquartered in Jersey, Channel Islands, while the business also has offices in Ireland and the Mohawk Territory of Kahnawà:ke.
Entain said the acquisition would drive growth in the country having already applied for a licence in Ontario, where online sports betting and iGaming legislation is set to go live from 4 April.
FTSE 100 operator Entain is already live in Canada with its Party and bwin brands and has built up a sizeable business in the country’s grey market to date.
Sports Interaction has also experienced rapid growth in Canada, with gross revenue rising 40% in 2021 to C$76m and generating EBITDA of C$18m.
Entain said the acquisition of Sports Interaction would be complementary to its existing portfolio and is expected to deliver approximately C$15m of synergies in 2023, resulting in a post-synergies acquisition multiple of 7x 2023 EBITDA for the business.
Avid Gaming CEO Will Golby and other members of the senior leadership team will stay with the business as it transitions to Entain.
“Sports Interaction is the leading Canadian sports betting and gaming brand and is aligned perfectly with our own ambitions of great customer service and ambitious growth, coupled with an unwavering commitment to sustainability,” said Entain CEO Jette Nygaard-Andersen.
“It is highly complementary to our existing operations in Canada, and the combination of its local expertise and Entain’s powerful platform will provide customers with an unrivalled range of exciting and engaging products in this fast-growing market,” she added.
Entain will continue to support the socioeconomic efforts of the Mohawks of Kahnawà:ke through Sports Interaction’s exclusive relationship with Mohawk Online.
In line with the United Nations Declaration on the Rights of Indigenous Peoples, Mohawk Online revenue is invested back into the community of Kahnawà:ke to provide funding for cultural and language programmes, schools, healthcare and other public services.
Mohawk Council of Kahnawà:ke Grand Chief Kahsennenhawe Sky-Deer said: “Entain is a world class operator with a genuine desire to positively contribute to the communities in which it operates.
“Kahnawà:ke is well known in the gaming industry, not only for our internationally recognised jurisdiction through the Kahnawà:ke Gaming Commission, but also for our socio-economic initiative, Mohawk Online.
“This new partnership between Entain and the Mohawks of Kahnawà:ke is mutually beneficial and brings with it prime opportunity for bolstering our self-sufficiency through the continuing success of Sports Interaction,” he added.
Entain’s share price climbed 3% to 1,617p per share at the time of writing.
Regulus Partners analyst Paul Leyland said of the deal: “Acquiring a powerful local brand, an influential local voice and local operational capability before Ontario opens clearly has strategic merit and considerable operational potential for Entain.
“However, there are a few occasions when stakeholders sell what looks like an invaluable and well-placed asset at just the right time before all the rules of the game change. The Mohawks may well have just pulled that off,” he added.