Entain PLC · LSE:ENT
Entain — GVC Holdings — Merger or Acquisition (November 2015)
22 slides from Entain's merger presentation, Nov 16, 2015
Slide 1: Presentation to accompany the Prospectus (to acquire bwin.party digital entertainment plc)
Presentation to accompany the Prospectus (to acquire bwin.party digital entertainment plc) 15.00 GMT, 16 November 2015 Kenneth Alexander, CEO Richard Cooper, CFO
Slide 2: Disclaimer
Disclaimer This presentation is available only under the URL http://www.gvc-plc.com/html/investor/takeover_code_bwin.asp and can only be accessed by persons who have read and agreed to the disclaimer for that URL. Notwithstanding that, there is the additional disclaimer which is below. Reliance upon
Slide 3: Disclaimer (cont.)
Disclaimer (cont.) The Company is under no obligation to update or keep current the information contained in this Presentation or to correct any inaccuracies which may become apparent, and any opinions expressed in it are subject to change without notice. Neither the Company nor any of its respectiv
Slide 4: A transformational transaction
A transformational transaction 1 Will result in one of the largest online publicly-traded sportsbooks 2 Substantial revenue and cost synergies 3 Shift towards regulated / taxed jurisdictions 4 Enhanced capital markets profile 5 Compelling pro forma valuation 6 Robust pro forma cash flow & financial
Slide 5: Contents
CONTENTS PART 1: THE TRANSACTION PART 2: THE GVC TRACK RECORD PART 3: THE TURNAROUND PLAN PART 4: THE ENLARGED GROUP 5
Slide 6: Section 1: The Transaction
SECTION 1 THE TRANSACTION 6
Slide 7: Key dates and facts
Key dates and facts • 15 May 2015, GVC announces it is in talks with bwin.party • 19 May 2015, GVC announces these talks include Amaya • 9 July 2015, proposal made to the board of bwin.party • 17 July 2015, bwin board recommend an offer from 888 • 27 July 2015, formal proposal made to bwin.party at
Slide 8: Key transaction terms – acquisition terms
Key transaction terms – acquisition terms 25.0 pence in cash and 0.231 new GVC shares for each bwin.party share Values bwin.party on a fully diluted basis of £1.012 billion Market closing share prices on 11 Nov 2015 were Purchase bwin.party 111.7 pence price GVC 401.00 pence Thus, offer
Slide 9: Key transaction terms - financing
Key transaction terms - financing Share Up to ~195.2 million new GVC shares issued to bwin.party shareholders consideration Represents ~66.8% of the Enlarged Group €400.0 million fully committed senior secured loan from Cerberus — Interest at 1% EURIBOR floor + margin of 11.5% Debt placement —
Slide 10: Pro forma data: 1, financial extracts
Pro forma data: 1, financial extracts Extracts from the interim statements 2015 (combined businesses, issued 28 Aug 2015) €millions Cash and cash equivalents 229.3 Payment processor balances 42.9 Customer liabilities 124.9 Bank and other debt 66.8 Capex, H1-2015 32.0 Corporate and retro-active Taxes
Slide 11: Pro forma data: 2, deal extracts
Pro forma data: 2, deal extracts Deal fundraising €millions Gross raised from the placing and subscription 212.6 Raised (gross) from senior debt 400.0 Some significant cash outflows €millions pp ref Cash to share and option holders Number £ price £ value bwin.party shareholders 845,045,900 25pence 2
Slide 12: Section 2: The GVC Track Record
SECTION 2 THE GVC TRACK RECORD 12
Slide 13: Proven acquisition track record
Proven ACQUISITION track record Acquisition of Sportingbet Acquisition of business and assets of Betboo (without Australian Business) Date 2 July 2009 19 March 2013 Operations in a number of jurisdictions where Experienced senior management to remain Sportingbet does not have a local licence wit
Slide 14: Proven growth track record
Proven GROWTH track record Management has a strong record of growing its sportsbook and casino businesses through both acquisition and organic growth In the three financial years ended December 31, 2014: Net Gaming Revenue grew from €60.3 million to €224.8 million Clean EBITDA grew from €15.
Slide 15: Section 3: The Turnaround Plan
SECTION 3 THE TURNAROUND PLAN 15
Slide 16: Clear, focused business strategy
Clear, focused business strategy Long-term shareholder value Integrate GVC’s Improve sportsbook Casino, Exploit B2B onto the Poker and capabilities bwin.party Bingo platform Deliver €125 million of cost savings (when measured against 2014) by the end of 2017 16
Slide 17: Sportsbook - Integrate GVC onto bwin.party platform
Sportsbook - Integrate GVC onto bwin.party platform bwin.party platform Improve profitability of bwin.party sportsbook Greater use of CRM systems to cross-sell bwin.party and Sportingbet brands Building a best-in-class trading and risk team ROI focused marketing and ROI focused investment in t
Slide 18: Gaming - Improve Casino, Poker and Bingo businesses
Gaming - Improve Casino, Poker and Bingo businesses Improve financial performance of bwin.party’s casino and poker operations: Reorganise existing infrastructure Refocus on key markets Bingo Intensify CRM efforts and improve product offering Continue steps already taken by bwin.party to st
Slide 19: Cost savings and synergies
Cost savings and synergies €125 million of sustainable synergies achieved by end of 20171 58% of synergies achieved by the end of 2016 Total cost of €60 million to achieve synergies, 95% of which incurred by end of 2016 Staff, outsourcing and other Operating a more streamlined and significan
Slide 20: Synergy phasing and its EBITDA impact
Synergy phasing and its EBITDA impact • €125 million when benchmarked against bwin.party’s 2014 cost base Expected pattern of synergy delivery 120 • 28 October, bwin.party announce €15 million already realised 100 • Effective synergy level is therefore €110 million 80 • 58% to be achieved on a full
Slide 21: Section 4: The Enlarged Group
SECTION 4 THE ENLARGED GROUP 21
Slide 22: Features of the enlarged GVC group
Features of the enlarged GVC group Leading online gaming company with Valuable assets a clear focus on sports betting International revenue base; licenced Experienced management team in more than 15 jurisdictions Differentiated growth strategy Responsible financial leverage underwritten by synergies