M&A: Entain successfully concludes acquisition of Angstrom Sports

Lea Hogg October 3, 2023

Gambling powerhouse Entain has successfully finalized its acquisition of Angstrom Sports, a specialist in sports modeling, forecasting, and analytics, in a transaction valued at up to £203.0 million (US$ 247.5 million). Entain has disbursed an initial sum of £81.0 million, as stipulated in the agreement announced in July, to secure Angstrom. Additional contingent payments of up to £122.0 million are slated for disbursement over the course of three years.

Forecasting, analytics and risk assessment

This acquisition establishes Entain as the sole global operator capable of providing in-house forecasting, analytics, risk assessment, and pricing for US sports betting markets. Entain believes that this integration will significantly enhance the betting experience for its customers. Angstrom Sports employs simulation-based predictive modeling to furnish sportsbook clients with pricing and forecasting capabilities. Primarily serving the US market, Angstrom’s services encompass the most popular sports competitions and leagues in the nation. Jette Nygaard-Andersen, CEO of Entain, expressed her delight at Angstrom’s integration into the company. She said that the potential for Angstrom’s advanced capabilities will be added value to Entain’s offerings, particularly in the US sports betting sector through BetMGM.

Diverse portfolio

This acquisition represents the latest addition to Entain’s expanding portfolio, following a series of strategic deals executed as part of the company’s ongoing growth strategy. Notable acquisitions include SuperSport in Croatia, which Entain acquired in late 2022, and the Polish sportsbook operator STS Holding. Additionally, Entain has pursued several M&A bolt-on deals, with the Angstrom acquisition falling within this category. In June, Entain completed its acquisition of Tiidal Gaming NZ, the owner of esports betting developer Sportsflare, for A$13.2 million. This transaction strengthened Entain’s presence in the esports betting sector. Earlier this year, Adam Greenblatt, who has been leading the BetMGM venture since its establishment in 2018, highlighted the significance of tech- and product-focused deals in the industry. The news of this acquisition comes as a positive development for Entain, which recently revealed that it would fall short of revenue expectations for the third quarter. The company attributed this shortfall to safer gambling measures, sluggish growth in key markets, and unfavorable sporting outcomes. Despite these challenges, Entain remains on course to meet its full-year EBITDA guidance, which is expected to range between £1.00 billion and £1.05 billion.

Shares nosedive as company adjusts to new UK gambling regulations

Entain faced a sharp decline in its stock prices, plummeting by up to 15 percent and marking a significant setback with shares down by 33 percent for the year. Factors including unfavorable sporting outcomes, the substantial impact of safer gambling regulations, sluggish growth in Australia and Italy, and regulatory challenges in the UK all contributed to the revenue shortfall. Entain had proactively initiated the implementation of safer gambling measures even before their formal announcement by the government. While research analysts maintain a ‘buy’ recommendation, the company adjusted its full-year outlook, anticipating a “low single-digit percent” decline in online net gaming revenues, highlighting uncertainties in Q4 performance. The evolving UK gambling landscape, with stricter regulations and enhanced player protection measures, reflects the government’s commitment to addressing gambling-related issues. Entain’s share price decline underscores the challenges in adapting to regulatory changes and shifting consumer preferences within the dynamic gambling sector, raising questions about the industry’s response to these new regulations and its future outlook.

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