Lottomatica Has Announced a €500m Bond Placement to Finance the Previously Announced Acquisition of SKS365

November 30, 2023 | Financial

ITALY (November 29, 2023) — November 2, 2023, the Italian gaming giant announced an agreement to acquire 100% of Malta-based SKS365 for an enterprise value of €639m.

To raise funds for the transaction, as well as to pay associated fees and costs, the operator has formally announced a proposed debt facility of €500m, which the business had previously referred to when it first publicised the deal.

This will consist of senior secured floating rate bonds maturing in 2030, as well as senior secured notes with a rate of 7.125% maturing in 2028.

The remaining costs of the acquisition, more than €139m, will be funded through available cash. Subject to anti-trust and regulatory approvals, the deal is expected to close in H1 2024.

The business added that it also has secured an expansion of a €50m revolving finance line that will become available following the acquisition of SKS365.

When the deal closes Lottomatica predicted it will have a net leverage of 2.8x, falling to 2.6x after accounting for synergies.

The company said it intends to return to a target leverage of 2-2.5x by 2025.

According to media reports in September, SKS365 had been the subject of a bidding war between Playtech, Flutter and Lottomatica.

The existence of the auction, conducted by financial services firm Lazard, was confirmed to by Playtech, which warned there was no certainty the supplier would be successful in the process.

Following the completion of the deal, Lottomatica will control 28.3% of the total Italian online gaming market. The business estimates that the deal will unlock around €60m in cash cost synergies, as well as €6m in revenue synergies.

It is planned for SKS365 CEO Alexander Martin to continue leading the operator post-purchase.


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