GVC Holdings has further reinforced its status as a truly international major player in the global gambling market with the purchase of a controlling 51% share in Crystalbet, a market-leading online gaming firm based in the Republic of Georgia. The price for the deal came in at just over €51 million, and GVC has also made a firm commitment to purchase the remainder of the company by 2021.
They have signed off to purchase the rest for the smaller of two options: either a flat €150 million, or seven times Crystalbet’s underlying earnings from 2020 (excluding interest, tax, depreciation and amortisation).
Crystalbet is said to be the largest sportsbook operator in the Republic of Georgia and the second largest competitor in the nation’s online gaming space, period. GVC Holdings will likely achieve a lower purchase price than the €150m, as Crystalbet pulled in just over €9 million in profits during its performance last year.
GVC Holdings CEO Kenneth Alexander made the following statement in the wake of the purchase: “Through access to GVC’s content, technology and digital marketing skills, we believe Crystalbet can become a clear leader in the regulated Georgian market… This acquisition is in line with our stated strategy of being a truly global player, with a focus on regulated and regulating markets.”
Koba Giglemiani, chief executive of Crystalbet, also stated that in “looking for a strategic acquirer to take Crystalbet to the next level, GVC was very much our first choice.”
Interestingly, GVC Holdings has a bit of history with so-called ‘grey’ markets; their presence in Turkey contributed to earlier merger negotiations with Ladbrokes Coral stumbling and stalling. But GVC announced in November 2017 that they had cleared their presence in Turkey by completing the sale of their Turkish assets, named as ‘Headlong Limited and other companies,’ to Ropso Malta Limited. In the wake of this announcement, they were finally able to put the deal with Ladbrokes Coral to bed, a mammoth deal in the billions which is now proceeding to the review stage under the Competition and Markets Authority (CMA). This review will cover a consideration of whether “a substantial lessening of competition” could be a result of the merger, amongst other matters.
The plan of action is for business as usual at Crystalbet, where the current operations management team will remain in position, as well as retaining their equity shareholdings. The deal is expected to complete by the end of March without further regulation being necessary.
