The Entain PLC (LON: ENT) share price barely moved after revealing that it had acquired the entire issued share capital of 365scores for a cash consideration of $150 million (approx. £120m) and contingent payments of up to $10 million (approx. £8m).
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Investors did not react to the news, maybe because it was unclear how the acquisition would benefit Entain over the long term. 365scores is a world-leading scores and sports media company that provides scores & sports information, editorial & social content, and sports-focused free-to-play games.
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365scores has a highly engaged global audience of over 15 million active users and is ranked among the top 5 scores apps globally. Entain intends to combine 365scores’ deep expertise in data-driven sports media content with its global scale and industry-leading platform capabilities.
Entain believes the tie-up would provide customers with more interactive content and experiences. The acquisition will unlock additional growth opportunities for Entain and supports the company’s global strategic ambitions. Many are waiting to see how Entain will integrate 365scores into its sports-focused services.
The acquisition comes when Entain is dealing with some challenges as it exits unregulated markets to focus on its core regulated markets. The company, which owns the popular Ladbrokes, Bwin and Coral, said it expects lower operating margins in 2023 compared to 2022.
Entain expects its core profit margins to fall to 26% in 2023, which is lower than last year, but still higher than the pre-pandemic period. The company’s shares fell in early February after MGM confirmed that it would not make another bid for Entain after its first bid for the entire company in January 2021 was rejected by shareholders.
The gambling group faces stricter gambling laws in the UK, including stricter age and identity checks, which have increased operating costs in recent years. Investors are waiting for the British government to publish its much-awaited whitepaper on the gambling industry this year.
Meanwhile, Entain runs a joint venture with MGM in the USA known as BetMGM, which operates in 25 US states and could expand into other states to pursue regulated gambling opportunities.
*This is not investment advice.
Entain share price.
The Entain share price edged 0.67% higher to trade at 1267.0p, from Tuesday’s closing price of 1258.5p.
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