The Board of GVC is pleased to announce the sale of Headlong Limited, a wholly owned subsidiary, and other companies (“Headlong and associated businesses”) that comprise its Turkish facing operations to Ropso Malta Limited, a company backed by investors currently providing the primary IT services to the business (the “Disposal”), for performance related earn-out consideration of up to a maximum amount of €150m in cash (the “Consideration”). The Consideration is receivable on a monthly basis over a five year period.
Completion is conditional on gaming regulatory and lender approval and is expected take place by the end of December 2017. Following completion, transitional services arrangements have been agreed for an initial limited period not to exceed 6 months.
In the year ended 31 December 2016, Headlong and associated businesses generated approximately €35m of Clean EBITDA; management expect a similar Group Clean EBITDA contribution from the respective operations for the financial year ending 31 December 2017. Headlong and associated businesses had gross assets of €21m as at 31 December 2016.
The decision to sell Headlong and associated businesses has been taken against a backdrop where, in an increasingly maturing and regulating online gaming world, the Board has concluded it is now appropriate for GVC to further increase its focus on regulated markets. Following the Disposal the regulated1 and/or locally taxed proportion of the Group’s NGR will increase to approximately 75%.The Disposal proceeds will be used for general corporate purposes. The Disposal will not impact the Group’s stated progressive dividend policy. In addition, the Board believes that the Disposal will increase the attractiveness of the Group to investors and potential consolidation partners.
The strong start to the quarter as reported with the trading update on 12 October 2017 has continued. Daily NGR in October was 26% (29% in constant currency) ahead of the same period in 2016, boosted by an exceptionally high sports gross win margin, 13%, and a positive response to new marketing campaigns.
Kenneth Alexander (CEO) said:
“As the Group evolves, our focus is increasingly on regulated markets and markets where we believe there is a realistic path to regulation. Today’s disposal is consistent with this strategy and enhances GVC’s position as a leading operator in a rapidly developing industry.”
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
1Includes markets in the process of regulating, based on NGR for the six months to 30 June 2017
For further information:
|GVC Holdings PLC|
|Kenneth Alexander, Chief Executive|
Paul Miles, Chief Financial Officer
Nick Batram, Head of Investor Relations & Corporate Strategy
|Tel: +44 (0) 1624 652 559|
Tel: +44 (0) 20 3938 0079
Tel: +44 (0) 20 3938 0066
|David Rydell||Tel: +44 (0) 20 7466 5066|
About GVC Holdings PLC
GVC Holdings PLC is a leading e-gaming operator in both B2C and B2B markets. GVC has four business segments with a number of brands; Sports Brands (bwin, Sportingbet, Gamebookers), Games Brands (partypoker, partycasino, Foxy Bingo, Gioco Digitale, CasinoClub), B2B and non-core assets. GVC acquired bwin.party digital entertainment plc on 1 February 2016. The Group is headquartered in the Isle of Man, is a constituent of the FTSE 250 index and has licences in more than 18 countries.
For more information see the Group’s website: www.gvc-plc.com