Betr Entertainment Limited · ASX:BBT
Betr Entertainment — BlueBet Holdings — Merger or Acquisition (April 2024)
73 slides from Betr Entertainment's merger presentation, Apr 11, 2024
Slide 1: Transformational Merger with betr and BlueBet Equity Raising
For personal use only Transformational Merger with betr and BlueBet Equity Raising APRIL 2024 COMMERCIAL IN CONFIDENCE
Slide 2: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER Important Notice and Disclaimer This Presentation does not purport to contain all the information that investors may require in order to assess the Proposed Merger. It contains select information only. Further information about betr and the Proposed Merger are described
Slide 3: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER Not an offer Future performance and forward-looking statements This Presentation is not an invitation or offer of securities for subscription, purchase or sale in any jurisdiction. This Presentation is not a prospectus, This Presentation contains certain “forward-lookin
Slide 4: Important Notice & Disclaimer
IMPORTANT NOTICE & DISCLAIMER Timetable, withdrawal and cooling-off The Underwriter, together with its affiliates and related bodies corporate, is a full service financial institution engaged in various activities, which may include trading, financing, financial advisory, investment management, inve
Slide 5: Today's Presenters
TODAY’S PRESENTERS MICHAEL MATTHEW SULLIVAN TRIPP EXECUTIVE CHAIRMAN BLUEBET FOUNDER BETR For personal use only Proposed Combined Business Non-Executive Proposed Combined Business Executive Chairman 1 Director and Chairman from 1 January 2025 ANDREW BILL DARREN MENZ RICHMOND HOLLEY CEO BETR CEO & MA
Slide 6: Transformational Merger of BlueBet & betr
TRANSFORMATIONAL MERGER OF BLUEBET & BETR BlueBet and betr to combine to create a profitable, leading Australian wagering operator 1. Materially enhanced scale and increased sustainable base of recreational customers For personal use only 2. Maximising use of BlueBet’s proprietary technology platfor
Slide 7: Executive Summary
EXECUTIVE SUMMARY Proposed lueBet Holdings Ltd (BlueBet or the Company) has entered into a binding Asset Sale Agreement (ASA) to acquire the wagering business of NTD Pty Ltd (betr) (the Proposed Merger) (BlueBet and betr, together the Combined Business) •B Merger • betr shareholders to hold c.56.9%
Slide 8: Details of the Proposed Merger
DETAILS OF THE PROPOSED MERGER • Proposed Merger to be implemented via BlueBet acquiring the betr wagering business by way of an asset purchase Structure and Merger Ratio • In consideration, BlueBet will issue to the betr shareholders (Sellers) 265.4 million fully paid ordinary shares (Consideration
Slide 9: Strategic Rationale of the Proposed Merger
STRATEGIC RATIONALE OF THE For personal use only PROPOSED MERGER
Slide 10: Strategic Rationale
STRATEGIC RATIONALE A powerful, profitable combination driven by highly complementary strengths Combined Business For personal use only • Combined Business expects to reach monthly EBITDA profitability in 1H FY25 and be EBITDA profitable in FY25 (including synergies, excluding one-off transaction an
Slide 11: Significantly Enhanced Scale & Increased Australian Market Share
SIGNIFICANTLY ENHANCED SCALE & 1. INCREASED AUSTRALIAN MARKET SHARE Significantly enhanced scale and the ability to engage betr’s large database when combined with BlueBet’s technology platform and loyal Australian Active Customer base 1H FY24 1H FY24 1H FY24 KEY METRICS AUSTRALIAN AUSTRALIAN (AUSTR
Slide 12: Maximising Use of BlueBet's Technology Platform
MAXIMISING USE OF BLUEBET’S 2. TECHNOLOGY PLATFORM Ability to migrate customers from betr’s third-party technology platform to BlueBet’s proprietary technology, driving greater customer engagement, retention and monetisation For personal use only Scalable and Secure • Custom-built on a cloud-based m
Slide 13: Maximising Use of BlueBet's Technology Platform to Improve User Experience
MAXIMISING USE OF BLUEBET’S 2. TECHNOLOGY PLATFORM TO IMPROVE USER EXPERIENCE Top Priority Items For personal use only 1. Migration: Prioritise user experience and migrate customer accounts and data 2. Personalised Promotion Engine: Improve promotion efficiency, share of customer wallet and drive ma
Slide 14: Significant Operating Efficiencies
3. SIGNIFICANT OPERATING EFFICIENCIES Cost synergies of ~$14.0 million from the Proposed Merger are expected to be fully realised on an annualised basis by the end of CY24 IT / technology platform 1. • Migration of customers from betr’s third-party technology platform to BlueBet’s platform, expected
Slide 15: Synergy Timeline
3. SYNERGY TIMELINE Cost synergies are readily identified and expected to commence immediately upon completion, with ~$11.0 million of the identified ~$14.0 million of annualised synergies expected to be realised in FY25 FY25 JUL 24 AUG 24 SEP 24 OCT 24 NOV 24 DEC 24 JAN 25 FEB 25 MAR 25 APR 25 MAY
Slide 16: Scale & Future Profitability to Support Ongoing Investment
SCALE & FUTURE PROFITABILITY TO 3. SUPPORT ONGOING INVESTMENT IN KEY DIFFERENTIATORS With scale and profitability, we can invest more in our key strengths and enhanced customer experience For personal use only Enhanced scale Drives greater profitability • Combined Business expects to reach monthly •
Slide 17: Combined Business Board
4. COMBINED BUSINESS BOARD Board of Directors to include highly experienced industry players including Michael Sullivan and Matthew Tripp MICHAEL MATTHEW SULLIVAN TRIPP For personal use only EXECUTIVE CHAIRMAN NON-EXECUTIVE DIRECTOR & CHAIRMAN FROM 1 JANUARY 2025 Founded BlueBet in 2015 Founded betr
Slide 18: Platform for Growth
5. PLATFORM FOR GROWTH The Combined Business has a multi-layered growth opportunity and can leverage its strengths to benefit from consolidation of the fragmented Australian market via accretive M&A Five Pillars of Growth: For personal use only 1. Unlock value of combined customer base 2. Scalable t
Slide 19: Combined Business Strategy
COMBINED BUSINESS STRATEGY ENABLERS Technology Team Compliance Cost Discipline + For personal use only Data & Analytics led STRATEGIC PILLARS ↓ Brand Product Engagement Inorganic Growth Following a brand A leading Australian Leverage key Grow share via review, be famous App, offering the strengths t
Slide 20: Australia - Illustrative EBITDA Profile
AUSTRALIA - ILLUSTRATIVE EBITDA PROFILE (HALF YEAR BASIS) 1,2 Significant cost synergies contribute to an attractive EBITDA profile with additional potential upside from betr’s Net Win margin increasing towards BlueBet’s Combined Business expects to reach monthly EBITDA profitability in 1H FY25 and
Slide 21: Overview of betr
For personal use only OF BETR OVERVIEW
Slide 22: Overview of betr
OVERVIEW OF BETR Launched in October 2022, betr has quickly grown to achieve significant scale 112k $673m For personal use only ACTIVE CUSTOMERS TURNOVER (1H24)1 (1H24)2 $80m GROSS WIN $50m NET WIN (1H24)2 (1H24)2 341k $332 COMMERCIAL IN CONFIDENCE OPEN ACCOUNTS3 COST PER FIRST TIME DEPOSITOR (56% 1
Slide 23: The betr Team Have a Strong Track Record
THE BETR TEAM HAVE A STRONG TRACK RECORD OVER A PERIOD OF MORE THAN 20 YEARS Date Acquirer Target INITIAL ACQUISITION 2005 BETR SHAREHOLDER GROUP For personal use only ADD-ON 2008 PARTIAL EXIT 2009 COMPLETE EXIT 2010 INITIAL ACQUISITION 2013-14 BETR SHAREHOLDER GROUP MERGER 2015 COMMERCIAL IN CONFID
Slide 24: The betr Brand
THE BETR BRAND An extraordinary launch campaign provides strong value in a growing brand seen as modern and innovative betr brand since launch Rising Brand Awareness Positive Perception on Key Attributes -2 -1 Dependable For personal use only Investment of over $100 million Basic Generous ✔ in brand
Slide 25: Customer Demographics
CUSTOMER DEMOGRAPHICS The betr customer base displays highly attractive characteristics… This segment is A stated preference for A preference for high That skews to a younger the ‘sweet spot’ sport margin multi products group of online punters in the category For personal use only Younger Customers
Slide 26: Customer Demographics: Complementary to BlueBet
CUSTOMER DEMOGRAPHICS …..which are complementary to the BlueBet customer base The betr database will grow the size of the under 35 cohort 3x for the combined business For personal use only betr BlueBet betr’s higher exposure to VIC complements BlueBet’s NSW 18-24 25-34 35-44 45-54 55-64 65+ COMMERCI
Slide 27: betr Customers on the BlueBet Platform
BETR CUSTOMERS ON THE BLUEBET PLATFORM BlueBet’s platform functionality provides a major opportunity to attract, retain and engage customers and grow share of wallet Identified priorities for betr customers Existing features on BlueBet platform Unique Promos 69% ✔ For personal use only Improving the
Slide 28: Strong Data and CRM Capabilities
STRONG DATA AND CRM CAPABILITIES betr leverages a strong CRM and data capability which can be deployed to grow revenue across the Combined Business Strong CRM and betr’s data-driven approach Additional capabilities unlocked data capabilities to the customer experience on the BlueBet platform For per
Slide 29: Q3 FY24 Trading Update - Australian Operations
Q3 FY24 TRADING UPDATE – For personal use only AUSTRALIAN OPERATIONS
Slide 30: Q3 FY24 Trading Update - Australian Operations
Q3 FY24 TRADING UPDATE – AUSTRALIAN OPERATIONS Continued acceleration in growth from BlueBet, with betr’s greater focus on profitability reflecting a maturing of the business and customer base Q3 FY23 Q3 FY24 PCP Q3 FY23 Q3 FY24 PCP $354.2m TURNOVER $119.1m $139.6m +17.2% TURNOVER $273.1m (22.9%) Fo
Slide 31: US Market Update
For personal use only UPDATE MARKET US
Slide 32: Update on US Operations
betr’s data-driven approach to the customer experience UPDATE ON US OPERATIONS Australia to be the primary focus of the Combined Business, with a strategic review of the US operations to be undertaken post Completion Update on US operations: Sportsbook-as-a-Solution (B2B Offer) For personal use only
Slide 33: BlueBet Equity Raising
For personal use only EQUITY BLUEBET RAISING
Slide 34: Sources and Uses of Funds
SOURCES AND USES OF FUNDS Sources of Funds A$m Notes Placement 20.01 • Growth initiatives and working capital: Includes a migration / promotional allowance and cash to For personal use only provide flexibility to execute on growth initiatives of the Combined Business, which are likely to include: Us
Slide 35: BlueBet Equity Raising Overview
BLUEBET EQUITY RAISING OVERVIEW • The Equity Raising is a fully underwritten Placement of 95.2 million new fully paid ordinary shares (New Shares) to professional, sophisticated and institutional investors to raise gross proceeds of $20.0 million • The Placement comprises two tranches: Offer size •
Slide 36: Equity Raising Timetable
EQUITY RAISING TIMETABLE Date Event Wednesday, 10 April 2024 • Trading Halt Thursday, 11 April 2024 • Announcement of the Proposed Merger and Placement For personal use only Thursday, 11 April 2024 • Bookbuild for the Placement Friday, 12 April 2024 • Announce completion of Placement and return to t
Slide 37: Appendices
For personal use only APPENDICES COMMERCIAL IN CONFIDENCE 37
Slide 38: Appendix A: Other Combined Business Materials
For personal use only APPENDIX A OTHER COMBINED BUSINESS MATERIALS COMMERCIAL IN CONFIDENCE 38
Slide 39: Combined Business Board CVs
COMBINED BUSINESS BOARD CVS Michael Sullivan Matthew Tripp Tim Hughes Ben Shaw – Executive Chairman – Non-Executive Director – Non-Executive Director – Non-Executive Director Was the CEO of Sportingbet Australia / William Hill for 13 Matthew Tripp has extensive experience over more than 20 Tim Hughe
Slide 40: Commitment and Alignment of Key betr Founder Shareholders
COMMITMENT AND ALIGNMENT OF KEY BETR FOUNDER SHAREHOLDERS betr Shareholder Escrow Arrangements1 Current Shares issued as % of Combined Shares issued % of Combined Shareholding part of Proposed Business (prior to as part of Equity Business following (#m) Merger (#m) the Equity Raising) Raising (#m) E
Slide 41: BlueBet Group Key Metrics Dashboard - 1H FY24
BLUEBET GROUP¹ KEY METRICS DASHBOARD - 1H FY24 Market share gains driving strong top line growth; trading outperformance delivers robust margins 6.3m Bet Count (+4.8%) Active Customers3 (+19.0%) 71,789 For personal use only $319.5m Turnover (+13.9%) Net Win margin (-0.1pp) 9.6% Cost per First $40.9m
Slide 42: Australian Trading Business - 1H FY24
AUSTRALIAN TRADING BUSINESS – 1H FY24 Strong performance with market share gains and robust Net Win margin 1H FY23 1H FY24 PCP 67,391 59,632 ACTIVE CUSTOMERS1 +13.0% • Turnover up 6.9% to $298.7 million, driven by Sports and Thoroughbred Racing where we For personal use only are outperforming +6.9%
Slide 43: betr Key Financial Metrics - 1H FY24
BETR KEY FINANCIAL METRICS - 1H FY24 TECHNOLOGY FEE $m REPORTED1 LAUNCH MARKET2 M&A COSTS3 EMPLOYEE COSTS4 PRO FORMA CREDITS5 Turnover 673.2 - - - - 673.2 Gross Win 79.8 - - - - 79.8 Gross Win % 11.9% - - - - 11.9% For personal use only Net Win 11.9 37.9 - - - 49.8 Net Win % 1.8% - - - - 7.4% EBITDA
Slide 44: betr Reported Financials - 1H FY24
BETR REPORTED FINANCIALS - 1H FY24 TECHNOLOGY FEE $m REPORTED1 LAUNCH MARKET2 M&A COSTS3 EMPLOYEE COSTS4 PRO FORMA CREDITS5 REVENUE Wagering revenue 12.1 34.6 - - - 46.7 Cost of wagering services (26.5) (6.5) - - - (33.0) Gross profit (14.4) 28.1 - - - 13.7 Interest revenue 0.1 - - - - 0.1 For perso
Slide 45: 1H FY24 Combined Business Financial Profile
1H FY24 COMBINED BUSINESS FINANCIAL PROFILE A B C D E F G BLUEBET BEFORE INCREASE DUE BLUEBET AFTER AFTER THE BETR SYNERGIES TRANSACTION TO EQUITY RAISING THE EQUITY RAISING PROPOSED MERGER ACTUAL INCREASE DUE TO TRANSACTION Method 1H FY24 BlueBet Actual change 1H FY24 betr B+C Synergies4 D+E+F of c
Slide 46: Appendix B: Key Risks
For personal use only APPENDIX B KEY RISKS COMMERCIAL IN CONFIDENCE 46
Slide 47: Key Risks - Introduction
1. KEY RISKS - INTRODUCTION • Before investing in BlueBet, you should be aware that several risks and uncertainties, which are both specific to BlueBet and/or betr, and of a more general nature, may affect the future operating and financial performance of BlueBet and the value of BlueBet’s shares. •
Slide 48: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Whilst the majority of the following risks affect both BlueBet and betr (each a Merger Party for the purpose of the risks in this appendix), certain elements of the risks, should they eventuate, may affect each standalone business differ
Slide 49: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Key Risk Summary For personal use only (b) Breach of Regulations In addition, any failure by a Merger Party to comply with relevant Regulations may lead to penalties, sanctions or ultimately the amendment, suspension or revocation of rel
Slide 50: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Key Risk Summary The following risk related to BlueBet only. For personal use only There is a risk that BlueBet’s continued expansion into the United States of America may be unsuccessful. BlueBet has secured market access in four jurisd
Slide 51: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Key Risk Summary (a) System disruptions and outages For personal use only Each Merger Party relies on the constant real-time performance, reliability, and availability of its technology system, including in relation to its website and mo
Slide 52: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Key Risk Summary (d) Inability to adopt new technologies For personal use only The Merger Parties operate in a highly competitive, dynamic and technology-based industry where there is constant product development and innovation. There is
Slide 53: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Key Risk Summary For personal use only The wagering industry is exposed to vulnerabilities to launder money illegally and there is a risk that each Merger Party’s products may be used for those purposes by its customers or employees. In
Slide 54: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Key Risk Summary The wagering industry is highly competitive. There are a number of more established, well-resourced companies offering products and services that compete with each Merger Party. These competitors 2.6 may spend more money
Slide 55: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Key Risk Summary Each Merger Party processes a high volume of transactions via its technology platform, which means that it is not practicable to undertake manual fraud checks of all transactions. There is a risk that For personal use on
Slide 56: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Key Risk Summary 2.10 For personal use only Each Merger Party’s future success is partly dependent on the realisation of benefits from investment in marketing campaigns and initiatives. Each Merger Party is focussed on promoting awarenes
Slide 57: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Key Risk Summary It is important for each Merger Party to grow its customer base in order to increase overall betting volumes. However, each Merger Party’s customer base may grow slower than it expects or than it has grown historically.
Slide 58: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Key Risk Summary Betting returns are volatile. While the odds offered to customers are intended to provide a target average return on turnover (or gross win margin) to each Merger Party over a large number of events, this outcome is not
Slide 59: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Key Risk Summary Each Merger Party may be subject to litigation and other claims and disputes in the course of its business, including disputes involving customers, employment disputes, contractual disputes, indemnity claims, occupationa
Slide 60: Key Risks - Risks Relating to BlueBet and betr's Businesses
2. KEY RISKS – RISKS RELATING TO BLUEBET AND BETR’S BUSINESSES Key Risk Summary 2.21 For personal use only Higher than expected inflation rates could lead to increased development and/or operating costs and potentially adversely impact consumer spending habits. If such costs cannot be offset by incr
Slide 61: Key Risks - General Investment Risks and Equity Raising Risks
3. KEY RISKS – GENERAL INVESTMENT RISKS AND RISKS ASSOCIATED WITH THE EQUITY RAISING Key Risk Summary 3.1 Shareholders may have their investment diluted as a result of the Equity Raising and by future capital raisings by BlueBet. While BlueBet will be subject to the constraints of ASX Listing Rules
Slide 62: Key Risks - General Investment Risks and Equity Raising Risks
3. KEY RISKS – GENERAL INVESTMENT RISKS AND RISKS ASSOCIATED WITH THE EQUITY RAISING Key Risk Summary The Equity Raising is fully underwritten by Ord Minnett Limited (Underwriter) pursuant to the terms of the underwriting agreement between BlueBet and the Underwriter summarised in Appendix D of this
Slide 63: Key Risks - Risks Related to the Proposed Merger
4. KEY RISKS – RISKS RELATED TO THE PROPOSED MERGER After completion of the Proposed Merger, existing BlueBet shareholders will be exposed to additional risks relating to betr and certain additional risks relating to the Combined Business and integration of the two businesses. Key Risk Summary For p
Slide 64: Key Risks - Risks Related to the Proposed Merger
4. KEY RISKS – RISKS RELATED TO THE PROPOSED MERGER Key Risk Summary BlueBet undertook a due diligence process in respect of the Proposed Merger, which, in part relied on legal, financial, taxation, synergies and operational due diligence on information provided by or on behalf of betr. If any such
Slide 65: Key Risks - Risks Related to the Proposed Merger
4. KEY RISKS – RISKS RELATED TO THE PROPOSED MERGER Key Risk Summary 4.5 Certain liabilities of betr will be assumed by BlueBet from completion of the Proposed Merger. Although BlueBet has undertaken due diligence on betr, there is a risk that these liabilities are greater than Historical For person
Slide 66: Key Risks - Risks Related to the Proposed Merger
4. KEY RISKS – RISKS RELATED TO THE PROPOSED MERGER Key Risk Summary 4.8 BlueBet and betr as standalone businesses, have particular accounting policies and methods which are fundamental to how they record and report their financial position and results of operations. For personal use only Integratio
Slide 67: Appendix C: International Offer Restrictions
For personal use only APPENDIX C RESTRICTIONS INTERNATIONAL OFFER COMMERCIAL IN CONFIDENCE 67
Slide 68: International Offer Restrictions
INTERNATIONAL OFFER RESTRICTIONS This document does not constitute an offer of new ordinary shares (“New Shares”) of BlueBet Holdings Ltd (the “Company”) in any jurisdiction in Singapore which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares
Slide 69: Appendix D: Underwriting Agreement Summary
For personal use only APPENDIX D UNDERWRITING AGREEMENT SUMMARY COMMERCIAL IN CONFIDENCE 69
Slide 70: Underwriting Agreement Summary
UNDERWRITING AGREEMENT SUMMARY Summary of Underwriting Agreement (f) (unable to issue) BlueBet is prevented from completing the Placement by virtue of the ASX Listing Rules, applicable laws, a governmental agency or an order of a court of competent jurisdiction; BlueBet has appointed Ord Minnett Lim
Slide 71: Underwriting Agreement Summary
UNDERWRITING AGREEMENT SUMMARY (p) (timetable) any event specified in the timetable is delayed by more than 1 business day without the prior approval of the Underwriter; (bb) *(hostilities) hostilities not presently existing commence or a major escalation in existing hostilities occurs involving any
Slide 72: Underwriting Agreement Summary
UNDERWRITING AGREEMENT SUMMARY If the Underwriter terminates its obligations under the Underwriting Agreement, the Underwriter will not be obligated to perform any of its obligations under the Underwriting Agreement that fall due after the date of termination. Termination of the Underwriting Agreeme
Slide 73: For personal use only
For personal use only
BlueBet Holdings — Merger or Acquisition (April 2024) on 6ix