GVC buys most of Georgian gaming leader Crystalbet

Sports betting and gaming group GVC Holdings has agreed to initially acquire 51% of the equity capital of Mars LLC - doing business as Crystalbet - it announced on Monday, with a commitment to acquire the remaining 49% in 2021.

The FTSE 250 company said Crystalbet is one of the leading online gaming operators in the Republic of Georgia.

It was launched in 2011 and holds licences to offer online gaming products - including sports betting, casino games, poker and peer-to-peer games - throughout the fully-regulated market of Georgia.

Since launch, Crystalbet had achieved “significant” growth, driven by what GVC called an “entrepreneurial” management team and a highly successful marketing strategy.

GVC’s board said it believed Crystalbet was the largest online sportsbook, and the second-largest online gaming brand overall, in the Republic of Georgia.

For the financial year ended 31 December, Crystalbet revenues were GEL102.9m (€34m), with EBITDA of GEL36.5m and a profit after tax of GEL30.8m.

As at 31 December, Crystalbet had gross assets of GEL24.9m, predominantly consisting of cash.

GVC said it believed it could further enhance Crystalbet's profitability and position in the Georgian online gaming market by leveraging the wider group's extensive portfolio of games content - including poker - customer relationship management, digital marketing capabilities and purchasing power.

GVC agreed to acquire an initial 51% of the equity capital of Crystalbet for a consideration of €41.3m, plus a working capital adjustment, to be satisfied all in cash from existing GVC resources.

The operational management team at Crystalbet, led by CEO Koba Giglemiani, would all remain with Crystalbet and retain their full equity shareholdings in Crystalbet following the initial acquisition.

It was intended that GVC would acquire the remaining 49% in 2021, subject to certain buyer protections, at a valuation at the lower of 7x the 2020 clean EBITDA, or €150m.

Completion was not subject to regulatory approval, and was expected to occur by the end of March 2018.

“We are delighted to welcome Crystalbet to the GVC Group, having been impressed with what the management team has achieved thus far,” said GVC CEO Kenneth Alexander.

“Through access to GVC's content, technology and digital marketing skills, we believe Crystalbet can become a clear leader in the regulated Georgian market.

“This acquisition is in line with our stated strategy of being a truly global player, with a focus on regulated/regulating markets.”

Levan Akhvlediani, chairman of Crystalbet, said he was “proud” of all that had been achieved at Crystalbet, and believed that in GVC the board had found an owner that would both respect the key elements that have made the business successful, and at the same time had the skills and knowledge to take the company to the next level.

Koba Giglemiani, CEO of Crystalbet, added that GVC was “very much” their first choice.

“GVC's experience and track record in many different geographic markets, together with its technology and marketing skills are key attractions for Crystalbet.

“We very much look forward to being part of GVC Holdings.”