SBC News Voice of the Sports Betting Industry
XLMedia Plc has informed the markets that it has reached a binding agreement to sell its media assets for Europe and Canada to Gambling.com Group.
The deal terms will see Gambling.com acquire XLMedia’s European and Canadian market portfolios for a total consideration of up to $42.5m , including a fixed sum of $37.5 million and a potential earnout of up to $5m.
The divestment follows XLMedia’s December 2023 announcement to explore opportunities to enhance shareholder value through asset sales. The transaction aligns with this strategy and is intended to allow the company to focus on its North America business.
The assets subject to the transaction include Freebets.com, WhichBingo.co.uk, Nettikasinot.com, and Vedonlyonti.com, alongside “smaller Europe and Canada properties”.
For the year ended December 31, 2023, the revenue and adjusted EBITDA attributable to the assets are estimated to be $21.4m and $6.6m respectively.
Shareholders were informed that the deal consideration of $42.5m represents approximately 3.5 times the expected total Adjusted EBITDA of the Group for 2023 and 6.4 times the estimated Adjusted EBITDA of the divested assets.
Of significance to XLMedia’s ongoing transformation, the sale of the European and Canadian assets equals approximately 200% of the London AIM-listed publisher’s market capitalisation as of March 20, 2024.
Moving forward, XLMedia plans to use the proceeds to cover transition costs, settle outstanding payments and tax provisions, and provide working capital to accelerate the U.S. expansion of its media network.
Post-transaction, XLMedia aims to concentrate on its North America operations, seeking to expand its sports footprint and diversify revenue streams.
Marcus Rich, Chair of XLMedia, said, “The Board believes the sale of these assets, which is approximately two times the current market capitalisation of the whole company, is an excellent outcome for XLMedia and its shareholders.
Importantly, this transaction will allow the Company to clear legacy liabilities, provide working capital, and return cash to shareholders.”
This week, Gambling.com announced that it had secured access to a $50m credit facility guaranteed by Wells Fargo Bank to be used for general corporate purposes and to strengthen the firm’s balance sheet.
The Nasdaq-listed publisher will announce its full-year 2023 results this afternoon, in which Gambling.com has expressed confidence in hitting its elevated year targets of corporate revenues in the range of $100-to-$104m, combined with a raised Adjusted EBITDA results of $36-to-$40m.
