GVC exits Spanish retail market by offloading Sportium stake
GVC Holdings has agreed a deal to sell its 50% interest in the Sportium Apuestas Deportivas joint venture with Cirsa, in a move that will mark its exit from the Spanish retail betting market.
Under the agreement, Cirsa will pay €70m (£63.2m/$78.7m) to assume overall control of the Sportium business that it currently operates with Ladbrokes.
Cirsa intends to fund the purchase in cash, as well as with repayment of loans and distribution of excess cash. The deal remains subject to regulatory approval.
Sportium primarily focuses on the Spanish retail betting market and in the 12 months through to December 31, 2018, contributed £2.5m to GVC’s proforma operating profit for the year. GVC obtained the interest in Sportium when it acquired Ladbrokes Coral in March 2018.
Despite offloading the stake, GVC will retain links with Sportium by serving as a B2B supplier to the business after the transaction goes through.
“GVC is one of the leading online gaming operators in Spain with bwin and the disposal of our interest in Sportium enables us to simplify our business in this market,” GVC chief executive Kenneth Alexander said.
“We have enjoyed a good working relationship with Cirsa and are pleased to be able to support them through a new B2B partnership.”
Confirmation of the deal comes after GVC yesterday (July 17) posted a 5% year-on-year increase in net gaming revenue during the six months to June 30, 2019, despite a decline in revenue within its UK retail arm.
Online gaming revenue was up 17% during the period, but UK retail revenue fell 10% year-on-year. However, the GVC European retail business – which includes Sporitum – saw revenue increase by 7% in the first half.