KKCG and Sazka Group announce a strategic investment by Apollo Funds to support their global expansion in the lottery and gaming sectors

KKCG AG (“KKCG Group” or “KKCG”) and SAZKA Group a.s. (together with its subsidiaries, “SAZKA Group” or the “Company”) today announced that funds managed by affiliates of Apollo Global Management, Inc. (“Apollo” and such funds the “Apollo Funds”), one of the world’s leading investors in gaming and largest alternative investment managers, have agreed to invest €500 million in the Company in coordination with Karel Komárek’s KKCG Group. The investment will be effected through an investment into SAZKA Entertainment AG (“SAZKA Entertainment”), a newly- established 100% wholly-owned subsidiary of KKCG, which upon closing of the investment, will be the 100% owner of SAZKA Group.

“Our business is entering a new era and this investment and strategic partnership will support our long-term expansion plans. I am happy that, after a series of discussions with major investment funds from around the world, we came to an agreement to partner with Apollo. I believe the interest in SAZKA Group from one of the world’s leading investors in gaming and largest alternative investment managers and globally confirms the value and strategy of SAZKA Group, and is an endorsement of the excellent work of the entire SAZKA Group management team. In partnership with a strong US investor, SAZKA Group is well positioned to expand in Europe, the US and other potential regions, continuing to focus on lottery and complementary gaming verticals. I am convinced that the gaming industry is one of the most promising sectors for the future and SAZKA Group aspires to be a global player in this sphere. I have absolute confidence that with support from Apollo my team will take the business to the next level” commented Karel Komárek, founder of KKCG and Chairman of the Board of SAZKA Group.

“We are very excited to invest in SAZKA Group, one of Europe’s leading private lottery operators” said James Kim, Apollo Partner and European Co-Head of Hybrid Value. “The company has a very successful track record of organic and inorganic growth and we believe this investment, coupled with our sector expertise and relationships, will help the management team achieve their strategic growth plans in Europe and around the globe.”

The majority of Apollo Funds’ €500 million investment will be used to capitalise on acquisition and growth opportunities in Europe and North America, with a focus on lotteries. The transaction implies an equity valuation of €4.2 billion (approximately CZK 111 billion) for SAZKA Entertainment.

J.P. Morgan acted as financial advisor to SAZKA Group and Clifford Chance LLP, Prague and London offices, acted as legal advisors to SAZKA Group on this transaction.

The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to be completed in 2021.