French entrepreneur Stéphane Courbit will take his tv manufacturing firm Banijay and on-line sports activities playing group Betclic public by way of a Spac backed by distinguished traders, together with Bernard Arnault and Vincent Bolloré.
The deal offers the brand new firm, FL Entertainment, an enterprise worth of €7.2bn, or €4.1bn in fairness worth. The shares will start buying and selling on Euronext in Amsterdam on July 1.
The transfer will permit Courbit, a savvy 57-year-old investor whose early success was in actuality TV reveals, to listing the companies he has spent greater than 20 years constructing by way of debt-backed acquisitions.
Banijay is without doubt one of the largest impartial TV content material producers exterior the US with €2.8bn in gross sales and €433mn of ebitda final 12 months, having benefited from a sizzling market pushed by the expansion of streaming companies.
It owns a sprawling community of manufacturing firms that end up actuality reveals comparable to MasterChef and Temptation Island, in addition to scripted dramas comparable to Versailles. But the €2bn acquisition of Endemol Shine introduced in 2019 left it needing to boost €2.4bn of debt simply because the pandemic hit Europe, shutting down TV manufacturing.
The different a part of the enterprise is the fast-growing Betclic, which is licensed to function sports activities betting in France, Italy, Poland and Portugal and is seeking to broaden internationally. It introduced in €700mn in gross sales final 12 months, making it a lot smaller than UK rivals Flutter Entertainment and Bet365.
“It is time to move to the next stage for Banijay and Betclic,” Courbit stated in an interview. “Both the content production and sports betting are globalising businesses where scale is important and the listing will allow us to grow further and consider more acquisitions.”
FL Entertainment will merge with a Spac known as Pegasus Entrepreneurs, one among three such automobiles based by Tikehau Capital, a European asset administration firm, and Financière Agache, LVMH founder Arnault’s funding firm.
Existing shareholders in Banijay and Betclic, comparable to Bolloré’s Vivendi, the Monaco-owned fund Société des Bains de Mer and billionaire Marc Ladreit de Lacharrière’s Fimalac, have agreed to reinvest within the new firm and can personal 20 per cent, 10 per cent and seven per cent of the share capital respectively.
The Spac deal will increase €250mn from “Pipe” financing — discounted shares bought to institutional traders — in addition to €250mn from Courbit’s firm Financière Lov, taking the entire together with a non-redemption settlement to greater than €600mn in money commitments.
Spacs, or particular objective acquisition firms, are shell firms that increase cash from traders and listing on the inventory market. Their sponsors then seek for a personal firm to take public by means of a merger. They skilled a surge of recognition within the US beginning in 2020, however have since attracted regulatory scrutiny and criticism from sceptics who’ve stated they result in hyped valuations and sponsors enriching themselves.
Courbit stated his deliberate itemizing by way of the Pegasus Spac was completely different as a result of the sponsors had been placing extra money in, moderately than cashing out. He argued that the transaction was a sooner and extra environment friendly option to reorganise and listing the companies than a standard preliminary public providing.
The newly listed entity could have a stronger stability sheet, he added, reducing its internet debt-to-ebitda ratio to between 3 and three.5 occasions, from greater than 4 occasions right this moment.
He stated the corporate may finally look so as to add a brand new enterprise line along with TV content material manufacturing and sports activities betting. “We will be opportunistic on acquisitions,” he added.