Multichoice offers $281.5M for 49% stake in BetKing as part of African expansion plan
African entertainment company, Multichoice has made an offer of about $281.5 million to Blue Lake Ventures Limited (BetKing) in a bid to increase its shareholdings in the company to 49% from 20%.
According to the company, the offer was made after the approval for an increase in its stake company was made on 10 June 2021 by the company’s board.
This comes just months after the entertainment company paid $81 million for 20% equity in BetKing sometime last year.
The latest deal includes the creating of an employee share option plan by allocating 10% of the company’s equity. Also, shareholders in the company will have shares in the diluted business.
Multichoice explained that its initial 20% stake will be diluted to 18%, then its subsidiary Mwendo, will then buy 9.6% of BetKing for $100 million as part of an equity raise to fund expansion. This will bring its stake to 27.6%.
Mwendo will also acquire a 21.4% stake in BetKing from minority shareholders, who are exiting partially, for $181.5-million, finally pushing the total stake to 49%.
However, completion of this latest deal is dependent on substantive conditions and the transaction becoming effective.
These include finalization of the employee share incentive scheme, securing debt funding by MultiChoice and regulatory approvals by the relevant competition or antitrust authorities in several jurisdictions.
Other conditions include the agreement of an appropriate exit clause for minorities who are partially selling down to recover some of their initial investment.
As a result of the transaction, the earn-out of $31m relating to the acquisition of the first 20% in the company will be triggered and payable.
This means that Multichoice will have to raise a total of $294.45 million (R4-billion) in rand-denominated debt to complete the deal
Speaking about the deal, MultiChoice Group CEO Calvo Mawela explained that Sports betting is an interesting market that is aligned to the company’s Pay-TV business.
“Sports betting is an interesting market that is aligned to our Pay-TV business. We have a lot of sport on our platform, and many people that are betting watch more games.”MultiChoice Group CEO Calvo Mawela
He explained that most people who bet watch more games, and Multichoice has lots of it on its platform.
Pan African Expansion
Co-founded in 2017 by Adekunle Adeniji, BetKing is betting company that has grown using entertainment and the latest digital technology fused with a highly customer-centric, data driven approach.
BetKing is popularly know for having super eagles star JJ Okocha as its brand ambassador
The company started off in Nigeria but is now also operational in Kenya and Ethiopia.
Multichoice revealed that the betting company plans an extensive pan-African expansion with an entry into South Africa already in the works.
The widespread inclusion of mobile payments in Africa, has helped online betting like BetKing is developing fast all over the continent.
If the new deal is sealed the company will have more arsenal to push dominance in Nigeria and fuel its pan-African expansion.
The transaction is expected to close in August 2021, once the conditions precedent have been met.
If you’d like to get featured on our Entrepreneur Spotlight, click here to share your startup story with us.
Get latest Technology news, reviews, business-related content with a deliberate emphasis on the African narrative and insightful analysis in Nigeria – straight to your inbox.