Better Collective has strengthened its standing in the North American sports media and social media spaces, securing terms to acquire Playmaker HQ.
The Denmark-founded media publisher will pay $54m on a cash and debt-free basis, including an upfront cash consideration of $15m, deferred payments of $1m and performance-based earnout payments over a three-year period of up to $38m.
Playmaker HQ has been consolidated into Better Collective’s accounts from 3 July, and will have to generate $75m in accumulating revenues and $25m in EBITDA during its first three years as part of the Stockholm-listed group.
Marc Pedersen, CEO Better Collective North America, said: “We have been following Playmaker HQ for some time, and are excited to announce the transaction today. Playmaker HQ offers access to millions of sports fans in the US, the majority of which are new in the Better Collective user base.
“We are excited to help enhance these fans’ sports betting experience, while also being able to utilise Playmaker HQ’s know-how to scale the product and revenue stream across Better Collective’s global portfolio.”
Additional details will see Better Collective benefit from ‘certain tax deductions’ relating to the acquisition price to the transaction being conducted as an asset purchase. The takeover is chiefly cash-funded, however, there is the option for a payment in Better Collective shares.
The acquisition will be conducted as an asset purchase meaning that Better Collective will expectedly benefit from certain tax deductions related to the acquisition price. The transaction will be funded by cash, with optionality to pay some of the earn out in Better Collective shares.
Brandon Harris, CEO Playmaker HQ, added: “Joining forces with Better Collective marks a significant milestone for Playmaker HQ. We cannot wait to make plays with Better Collective’s world class team who will help us create amazing content, experiences and opportunities, reaching an even wider audience of sports fans globally.
“I know our creators are going to do amazing things with the support of Better Collective’s team and resources. We are just scratching the surface, and we are so excited to align with Better Collective to help achieve our vision of building the world’s leading sports media group.”
Better Collective has identified three key benefits to integrating Playmaker HQ into its portfolio. The first benefit cited was an expansion of its sports betting audience to gain access to a wider base of sports fans. This, the firm believes, will further enhance value for its operator partners.
Additionally, the group has cited Playmaker HQ’s knowledge of sponsorship sales as having potential for monetizing Better Collective’s non-betting audience and the ability of its new holding to ‘scale content’ internationally, despite being active only in North America.
As it stands, Playmaker HQ distributes over 2,000 monthly sports pieces across Instagram, Twitter, YouTube, Snapchat and TikTok, across a cross-platform following of over 200 million and reaching 500 million monthly.
Playmaker HQ joins Better Collective’s portfolio of US brands – including Vegas Insider and Action Network – as the company seeks an enhanced profile in the country, where the regulated betting space has grown at a rapid rate since 2018.
Following a strong Q1, Better Collective anticipates FY2023 revenue between €315m-€325m and EBITDA between €105m-€115m, with each estimate marketing an increase of 17-21% and 24-35% respectively.