The past month saw us embark on an exciting new chapter in our strategic development as we completed the acquisition of Enlabs, the leading online sports betting and gaming business in the Baltics. The acquisition marked the latest addition to our world leading portfolio of sports betting and gaming brands and saw us expand our operations across three additional regulated markets, in line with our overall growth strategy.
Headquartered in Latvia, Enlabs is the largest iGaming operator in the Baltics with an online market share of 25%, led by its flagship brand Optibet. Based on total revenues, Enlabs is the market leader in Latvia, the second largest in Estonia, and among the five largest operators in Lithuania. The company is headquartered in Riga with offices across the region.
Enlabs delivers three compelling strategic rationales:
- Access to new, fast growing and regulated markets: The Baltic region represents a highly attractive, locally regulated and fast-growing gaming market. From 2016 to 2019, Latvia, Lithuania and Estonia experienced CAGR of 40%; this growth is set to continue at a CAGR of 6% between 2020-2025
- Significant further growth opportunities: The adjacent Nordics and Eastern European markets present exciting opportunities for Enlabs. The fast-growing markets of Belarus and Ukraine, for example, are expected to achieve CAGR of 25% from 2020 to 2025. The acquisition provides us with a platform to drive further growth through both Enlabs’ and our bwin and partypoker brands, while giving us the requisite expertise to enter Russian speaking markets in Eastern Europe
- Financially attractive and earnings accretive: The acquisition provides synergies by leveraging our scale, technology and central cost efficiencies. It is expected to be earnings accretive in the first full year of ownership and will enable us to extend our leading player protections into the region
Employing over 300 employees, Enlabs is expected to generate Net Gaming Revenue of €89.5m (c.£80.5m) and EBITDA of €23.5m (c.£21.1m) throughout FY21. The company’s strong market positions and experienced management team will be pivotal in driving future growth in its current Baltic territories and beyond.
The rationale for the deal was recognised by Enlabs’ own Board, leading the Independent Bid Committee of Enlabs to resolve unanimously to recommend the company’s shareholders accept the offer.
“When Entain’s interest to acquire Enlabs emerged, we instantly saw the strategic logic,” said Niklas Braathen, the Board Chairman of Enlabs, who will remain onboard to develop operations in the Baltic and Nordic regions and expansion into Eastern Europe. “Entain’s experience and track record in many different geographic markets, together with its market-leading proprietary technology and world-class marketing skills are key attractions for Enlabs as we look to grow in the Baltics and beyond.”
The acquisition further delivers on our growth strategy of expansion into new regulated markets, driving further growth and creating long-term benefits for Enlabs employees and other stakeholders. Leveraging the combined expertise of the enlarged group will help to deliver an enhanced product offer to Enlabs’ customers and extend Entain’s industry-leading player responsibility into the region.
Around 99% of Group revenues now come from fully regulated or regulating markets. We continue towards our goal of deriving 100% of Group revenues through such markets by 2023; the acquisition of Enlabs is another milestone on that journey.
In a highly competitive and regulated industry, where consolidation is a key theme, Entain is able to provide the scale and platform needed to further support Enlabs’ long-term growth