GiG acquires KaFe Rocks after closing stellar Q3 trading

Gaming Innovation Group (GiG) has reported another successive quarter of revenue growth ahead after announcing its resumption of M&A activity in pursuit of a stronger US profile.

On track for ‘world leader’ ambitions

Group-wide revenue for the quarter reached an ‘all time high’ of €31.8m, up 39% year-on-year from corresponding Q3 2022 figures of €22.9m, whilst EBITDA also rose 61% to €13.6m (Q3 2022: €8.5m) with a margin of 42.8% (37%).

Regarding the group’s two business segments, GiG Media revenue increased 49% to €22.5m (€15.1m) with EBITDA up 35% to €10.4 (€6.8m) whilst Platform and Sportsbook revenue rose 20% to €9.3m (€7.8m) with EBITDA up 47% to €3.2m (€1.7m).

Post-quarterly developments have included the appointment of Andrew Cochrane as new Chief Business Officer (CBO) for Platform and Sportsbook, although the most significant development is the group’s re-entry to M&A activity.

Petter Nylander, Chairman of GiG. said: “I am delighted to share with you the strong Q3 2023 results for Gaming Innovation Group, as we continue our journey towards becoming world leaders in the igaming industry, focusing on our two core business areas, Media and Platform & Sportsbook. The third quarter of 2023 has proven to be another period of growth and achievement.”

Operational highlights for the Malta-based B2B firm during the quarter included geographic expansion with market entries into Serbia and Portugal, as well as the US state of Maryland, via deals with Betsson’s Rizk, GoldenPark and Crab Sports, respectively. Deals were also signed with Mooir eGaming and Bplay. 

Meanwhile, the December 2022 acquisition of AskGamblers from Catena Media – purchased from the media affiliate for €45m – was cited as contributing significantly to GiG’s Q3 performance, with revenue for the unit rising 45%.

Further highlights from the quarter included key leadership announcements – Jonas Warrer, was appointed acting CEO to replace Richard Brown and guide the group through its strategic split, whilst Richard Carter took on CEO duties of the Platform and Sportsbook.

KaFe Rocks joins GiG Media

The biggest move for the firm post-Q3, however, has been the aforementioned resumption of its M&A activity, with GiG announcing a €35m acquisition of casino media and affiliate company KaFe Rocks, which rebranded as Time2Play back in June.

GiG’s statement explained that its core aim is to solidify GiG’s position in the US market via its new holdings’ and brands, whilst Kafe Rocks is also active across more than 15 other markets.

KaFe Rocks has demonstrated ‘impressive revenue growth’ over the past 12 months and GiG expects further growth and profitability, seeking to replicate the success of last year’s AskGamblers takeover.

The company expects Kafe Rocks to generate revenue of at least €23m in 2024 with an EBITDA margin above 45%, implying a 2024 EBITDA multiple of around 3.6x, and further anticipates the margin to increase over the next five years.

Aimee Speight, Spokesperson for KaFe Rocks, said: “It’s a momentous occasion for KaFe Rocks to join forces with GiG Media. We considered several buyers but were persuaded to go with GiG Media based on the strong performance the company has shown over the last few years. Joining GiG Media, we are optimistic about seeing Kafe Rocks business venturing into new heights.”

The main benefit GiG expects Kafe Rocks to bring to its media division is diversification, specifically citing improvements to the customer experience, website and market concentration, and reduction of overall risk.

Based on these factors, GiG projects that its media division – which will operate separately from the Platform and Media unit once the planned split is completed – will generate revenue of between €125m-€135m in 2024.

Warrer remarked: “We want to remain the leading casino affiliate in the industry and grow in the North American market. Our acquisition of KaFe Rocks validates these goals. After the successful integration of AskGamblers, we have been looking for the next splendid candidate to join the family. 

“In KaFe Rocks, we’ve found a flourishing business led by an exceptionally skilled team. Their reputable affiliate assets will undoubtedly drive growth for the broader group. I eagerly await working closely with the KaFe Rocks team.”

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