Lottomatica’s €500M Bond Issue and €50M Borrowing for SKS365 Acquisition

The Italian gaming behemoth Lottomatica revealed its audacious ambitions to buy all of SKS365’s share capital earlier this month, which was a huge step. Pending regulatory approval, the acquisition, valued at a significant €639 million ($702 million), is expected to close in the first half of 2024. It was recently signed.

€500 Million in Debt Notes

In order to finance this significant transaction, Lottomatica has decided to issue debt notes worth €500 million, or around $549.1 million. A first tranche of senior secured notes with a variable rate of 7.125% will be followed by a second tranche of fixed rate notes with the same fixed rate. This financial maneuver consists of two parts. This action is consistent with the larger financial plan of Lottomatica, which is represented by the €565 million 7.125% Senior Secured Notes due 2028 bond.

The exact split between the two bonds is yet unknown, however, it should be revealed at transaction closing or shortly before completion.

Lottomatica has obtained revolving credit cash borrowing of €50 million (about $55 million) under an existing revolving credit arrangement in addition to the notes’ issue. With this two-pronged financial strategy, Lottomatica is guaranteed to be able to pay for the SKS365 purchase as well as all related fees and expenses.

CBO Spa, a fully owned subsidiary of Lottomatica, will carry out the transaction. Notably, Playtech’s unsuccessful effort at acquisition preceded this successful maneuver, and there were rumors that Flutter Entertainment was thinking of doing a similar thing for SKS365.

The CEO of Lottomatica, Guglielmo Angelozzi, is upbeat about the purchase and anticipates a big improvement in the gaming industry in Italy. With more than 1,000 stores and a strong web presence, SKS365 is a well-known brand in the community. Angelozzi recognizes SKS365’s reputation as a high achiever and gives its management team credit for turning the company into a force to be reckoned with in the community.

SKS365 CEO Alexander Martin agrees, saying he is happy to have joined the Lottomatica family. Lottomatica, he feels, is the perfect acquisition partner, highlighting the complementary nature of the two companies.

To put things in perspective, SKS365, the company behind brands like PlanetWin365 and PlanetPay365, was named one of Italy’s best employers in 2023.

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