Gaming Innovation Group (GiG) has struck a €45m deal to acquire the casino affiliate website AskGamblers and several smaller domains from Catena Media.
Of the total consideration, GiG will pay €20m in cash on closing, €10m 12 months after closing and the €15m balance 24 months after closing.
The transaction, which includes a deal for JohnSlots and NewCasinos as well as AskGamblers, is expected to be completed in Q1 2023.At the time of writing, shares in GiG were up nearly 6%, while Catena Media’s share price fell by 1.7%.
iGaming NEXT understands Catena Media was initially targeting a higher sale price in the region of €70m to €80m as little as six months ago.
Catena Media first announced its intention to sell its flagship online casino affiliate brand AskGamblers in May 2022 when it launched a strategic review of its business.
In August, the Malta-based affiliate said it has also included its European sports betting and casino assets that are separate to AskGamblers in its review to free up resources from its legacy European assets to focus on higher margin growth opportunities in the US, Asia-Pacific and Latam markets.
GiG’s affiliate business meanwhile has expanded steadily. In Q3 2022, GiG Media generated revenue of €15.1m, an increase of 35% year-on-year, or 2% compared to the previous quarter in 2022.
With this acquisition, GiG Media said it aims to diversify its media business further and “cement its position in the industry as the leading casino affiliate”.
GiG CEO Richard Brown: “Combining the assets with GiG’s media technology and operational capabilities, provides us with a great opportunity to expand our global reach and to deliver a path for the brand to continue with its strong evolution.”
The acquired websites generated revenue of €12.9m in the first nine months of 2022 with an EBITDA of €8.4m.
Going forward, GiG expects to have an EBITDA margin between 60-70% from the acquired assets, which are expected to generate around 53,000 First Time Depositors (FTDs) in 2022.
GiG said the websites are strong in markets that are currently non-core markets for GiG Media, therefore expanding the company’s geographical reach. Previous suitors are understood to have questioned the grey market exposure of AskGamblers, according to sources familiar with the process.
Further to the revenue growth potential, GiG expects to realise operational synergies after the acquisition via the shared use of marketing technologies, business intelligence systems and key functions.
Commenting on the acquisition, GiG CEO Richard Brown said: “GiG is extremely excited to take over the premium AskGamblers brand from Catena.“Combining the assets with GiG’s media technology and operational capabilities, provides us with a great opportunity to expand our global reach and to deliver a path for the brand to continue with its strong evolution.
“The expansion of our strategic position in conjunction with the deal structure gives the group another great blueprint for growth. We look forward to integrating the assets and current staff into Gaming Innovation Group,” he added.
The deal is structured by way of a Share Purchase Agreement (SPA) with GiG’s subsidiary Innovation Labs, which is part of GiG Media.
As part of the transaction, GiG will acquire two subsidiaries: Catena Publishing in Malta and Catena Media D.O.O. Beograd in Serbia that operate the AskGamblers brand and the associated online casino brands JohnSlots and NewCasinos.
These companies currently employ around 90 people, with 80% based in Serbia and 20% in Malta.
GiG will finance the initial consideration through a combination of own cash, a revolving credit facility (RCF) and a share issue.
Existing shareholders have committed to participate in the share issue and the RCF, securing sufficient financing to complete the transaction at closing.
Catena Media CEO Michael Daly: “We are now in an even stronger financial position and equipped to capture the exciting market opportunities ahead of us and to take steps to broaden Catena Media’s exposure and access to the US capital markets over time.”
Catena Media CEO Michael Daly commented: “Today’s agreement is a major step in our journey to focus the business on online sports betting and casino affiliation in high-growth, regulated markets in the Americas.
“I am confident that in GiG we have found a buyer that will provide a strong environment for AskGamblers and the other brands and their talented people to develop and grow,” he added.In addition, Daly noted: “We are now in an even stronger financial position and equipped to capture the exciting market opportunities ahead of us and to take steps to broaden Catena Media’s exposure and access to the US capital markets over time.”
Catena Media said it intends to continue streamlining its business. This will involve further divesting from markets and assets, including the group’s Financial Trading brands, as well as the remaining European brands.
The affiliate further revealed that third parties have shown interest in acquiring the Financial Trading business and is currently evaluating its position.