MultiChoice spends R4bn to increase stake in BetKing
MultiChoice has increased its stake in Pan-African online sports betting company BetKing to 49%, a move the pay-TV giant says is in line with its strategy to expand its entertainment ecosystem and develop meaningful drivers of future value.
The company announced yesterday that through its wholly-owned subsidiary, Mwendo Holdings, it will invest R4.4 billion in BetKing to increase its shareholding.
However, the deal is subject to MultiChoice securing debt funding to finance the transaction.
Last year, MultiChoice initially invested R1.3 billion in BetKing for a 20% stake, as the pay-TV group expanded its entertainment ecosystem.
Yesterday, MultiChoice said consumers have a growing abundance of entertainment options available to them and it is, therefore, important for the company to expand its entertainment platform to provide a more comprehensive offering with a greater number of products and services.
“Pursuing an adjacency such as sports betting creates a natural extension to the MultiChoice video entertainment platform to further enhance its product set. Well-established in Europe and fuelled by its legalisation in the USA in 2018, the global sports betting market is currently experiencing a surge in growth,” says MultiChoice.
Further, the company notes, Africa currently holds only 2% of global sports betting revenue, which justifies the BetKing investment, as the continent is poised for significant momentum as it begins to play catch-up.
“BetKing is particularly well-positioned to capture a large share of the African growth opportunity. It will also benefit from SuperSport’s strong brand and reach across the continent, as well as MultiChoice’s regional presence and acumen. BetKing will use the proceeds of the capital raise to expand its product set and geographic footprint to more markets on the continent.”
BetKing is one of the leading digital and sports entertainment platforms focused on the African continent.
According to MultiChoice, BetKing’s vertically-integrated operating model is unique on the continent and enables the company to operate at scale and speed, while also being able to customise its approach for new markets and adjacent segments.
“The business is expected to expand rapidly across Africa in the coming years, whilst broadening its vertical presence to further enhance its digital entertainment portfolio,” it says.
MultiChoice’s increased stake in BetKing comes on the back of booming operational success for the company in Africa. Excluding its home market, the pay-TV group is enjoying operational success on the continent, including delivering the strongest festive season growth to date, during the year ended 31 March 2021.
In the period under review, MultiChoice’s business in Africa grew its 90-day active linear pay-TV subscriber base by 8% year-on-year, or 0.8 million subscribers, despite a challenging macro-economic environment and ongoing consumer pressure.
Revenue was up 11% (14% organic) to R17.2 billion, which the company said was supported by solid subscriber growth and inflationary price increases implemented in most markets.