Multinational lottery operator Allwyn Entertainment, previously SAZKA Entertainment AG, with the help of its partnership with Cohn Robbins Holding Corp. (CRHC) will become a publicly-listed company on the New York Stock Exchange, furthering its goal to become a “global lottery-led entertainment platform.”
The deal, announced January 21, values Allwyn at $9.3 billion. According to the filing, the global lottery industry is valued at $300 billion, with growth opportunity for Allwyn because of the high participation in an industry resilient through market cycles and poised to grow from digitization and increasing online sales.
Allwyn reportedly “collected approximately 16 billion in wagers over the 12-month period ended June 30, 2021.” It operates lotteries in Austria, the Czech Republic, Greece, Cyprus and Italy, as stated in the filings. Furthermore, Allwyn projects “$810 million (€710 million) in Adjusted EBITDA from approximately $1.7 billion (€1.5 billion) in net gaming revenue in 2022.”
Allwyn will own approximately 83% of the company and no new shareholder will own more than 5% after the transaction.
Pursuant to the agreement, CRHC shareholders will have the chance to get ownership stakes at a maximum value of $8.7 billion because of a bonus pool of 6.6 million CRHC shares. CRHC, has about $828 million cash in trust. Upon consummation, investors have agreed to buy more than $350 million of securities of the combined company (the PIPE Investment), which includes CRHC’s sponsor entity committing $50 million.
The NYSE listing will help strengthen Allwyn’s global growth strategy by providing it with greater access to capital markets, expanding its global brand, such as by entering the U.S. market, and add to its “reputation for transparency as a longstanding issuer of publicly-traded bonds with the additional distinctions of being an SEC-regulated company listed on the World’s premier stock exchange.” The filings also state that developing trends in gaming and sports betting would also be good opportunities for Allwyn to strengthen its position in markets it is already operating and those to which it will expand. Additionally, Allwyn also uses some of the money from its sales to help the countries in which it operates.
“It is an opportune time for Allwyn to take this exciting step. Jurisdictions in Europe and North America should have higher expectations for the innovations their lotteries can deliver,” Allwyn CEO Robert Chvatal said. “With consumers expecting the option to experience and pay for entertainment online, Allwyn is building stronger, more individualized and more valuable relationships with our customers.”
“We have worked with hundreds of management teams and invested in hundreds of companies in our careers, but we founded Cohn Robbins to seek out just one,” Gary D. Cohn and Clifton S. Robbins, Co-Founders and Co-Chairmen of Cohn Robbins Holdings Corp., said. “We believe that Allwyn is the right company, in the right industry, at the right time and with the right leadership team. We are excited by the growth opportunities the Company has ahead of it and we look forward to providing our support.”
The deal, which has been unanimously approved by both boards, is expected to close in Q2 2022, pending CRHC stockholder and regulatory approval as well as other customary closing conditions. The company did not state what it would be trading under on the NYSE.
Upon closing, Mr. Robbins will become part of Allwyn’s Board of Directors and Mr. Cohn will become Special Advisor to Allwyn’s Board of Directors.
Allwyn and KKCG Investment Group (its majority owner) are represented by Kirkland & Ellis LLP as well as Clifford Chance and its financial advisor is PJT Partners, wo is also acting as a joint placement agent on the PIPE Investment. Cohn Robbins is represented by Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates; CRHC’s financial advisor and joint placement agent on the PIPE Investment is Citi. Credit Suisse is acting as Equity Capital Markets advisor to CRHC. Meanwhile, the placement agents’ legal advisor is Winston & Strawn LLP.