Adam Warren, Managing Director of Greentube Malta, discusses how a successful M&A strategy can be key to unlocking the potential of markets, such as Italy.
When it comes to considering the equation of an acquisition, it can be the case that one plus one equals two.
By bringing on board one B2C company to complement another – as we did with the acquisition of Admiral, which joined Starvegas within our brand portfolio – we effectively doubled our market share in Italy, while also creating new and mutually beneficial synergies.
The Italian market differs from some others in Europe in that it has a blanket ban on gambling advertising which naturally creates difficulties when operators are attempting to grow their brand identities and raise awareness. Within that context, the acquisition of Admiral was particularly attractive, as it effectively provided us with a billboard, allowing us to push our brand names and engage in omnichannel and cross-marketing activities once the customer had been acquired.
When regulations ban advertising, it pays to use different channels in which to create greater brand exposure.
In some quarters, there is a perception that an acquired company is in danger of losing what made it stand out as a success in the first place, through a loss of individual identity as it is brought into a new organisational structure. What is key, we feel, is that a focus is placed on enhancing the essence of what made the acquired company stand out originally.
In the case of Admiral, Greentube had been examining acquisition options for a number of years in preparation and, during this time, had worked with the company to enhance its brand. The strength it built up during this period has been reflected in excellent financial results, providing clarity regarding the attributes it had that we wanted to bring fully into our organisation. Alongside Greentube’s clear strength around online provision and SEO, we continue to see a clear and mutual benefit from the official alliance.
The important ingredients
When undertaking an acquisition, strong levels of communication between both parties is key.
While each company may do great things within its own field, this is because there are different understandings and experiences involved. While one company may follow a particular process because that is the way it has always been done, to a level of success, explaining the reasoning behind methodologies that underpin processes creates clarity.
When both parties have been in the market for a long time, certain processes may have continued on a legacy basis and in those cases, honest conversations are useful to explore new methodologies. Communication, mutual understanding and an openness to new ways of thinking are highly beneficial.
Another important factor to consider is the potential to become more streamlined through the consolidation of systems. Within a single core system, Greentube can now move quickly and be market-specific to Italy, without having to also focus on how the systems would operate in other jurisdictions.
Our omnichannel approach can only be enhanced by Admiral’s strong land-based heritage, alongside cross-marketing abilities between the two brands. We can also put before the player a greater choice of content, rather than simply having two skins on top of the same engine.
Admiral is more sports-focused while offering casino, and Starvegas has a slot focus while also offering sports. What both brands have in common is sub-products to offer their customers, but the relative approaches will continue to be different.
While the portfolios will ultimately be similar, both brands will be taking different approaches and identities, and it is this commitment to improving rather than picking apart proven identities that will provide the impetus for further growth.