Unibet Group plc has entered into an agreement to acquire France’s Solfive SAS, operator of the Eurosportbet and Eurosportpoker brands in the French market.
Under the terms of the agreement, Unibet will acquire Solfive, owner of SPS Betting France SAS, for an initial consideration of €5.625m plus net cash adjustment of €1.5m, payable upon closing. The acquisition also includes an earn-out component based on performance during the first six months of trading post-acquisition, together with an agreement to provide funds to settle a €2.375m fixed debt.
Solfive acquired SPS Betting in April of this year from French media group TF1 for an undisclosed amount after the company incurred a loss of €26.0m in the 2010 financial year as a result of diffucult market conditions in France.
Once one of its strongest markets, Unibet quit France during the second quarter of 2010 citing the country’s unfavourable licensing conditions.
The company says it will now leverage the legacy strength of the Unibet brand in France and its historic customer base to increase revenues, but maintains that market conditions – which remain poor - will result in the acquisition having an insignificant impact on profitability in 2012.
“This strategic acquisition gives Unibet immediate access to the French market with a technical platform that is already licensed offering sports betting, poker and horse racing,” said Unibet CEO Henrik Tjärnström.
“We will rebrand the business quickly to Unibet.fr. The combination of Unibet’s strong brand, the efforts already made to build a significant market share for EurosportBet, and the difficult decisions taken by management to control costs give the best opportunity to be successful in a very difficult market.”
The acquisition remains subject to regulatory approval from ARJEL, which is expected to be received by the end of the year.
Commenting on the acquisition, Solfive Group CEO Olivier Ou Ramdane said: “The extremely challenging terms and conditions for the French market make it very difficult for an independent operator to develop their business. We are delighted therefore to have this opportunity to work with Unibet, who have the experience, resources and brand legacy in France to succeed in this market in the long term. We are proud of the achievements of the Eurosportbet team in establishing a strong market share and believe that this transaction provides the best platform for the long term success of the business and therefore the best opportunities for the excellent team that we have built.”
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