Luckbox owner Real Luck Group has signed a letter of intent to acquire an Asian-focused iGaming platform in an all-stock deal.
The deal is expected to close by the end of 2022, subject to TSX Venture Exchange approval.
The acquisition is set to take place as a share exchange on a debt free basis, with Real Luck acquiring 100% of shares in the undisclosed target business.Luckbox will hand over up to seven million common shares in exchange for the business, six million of which will be payable dependent upon it reaching certain milestones by January 2025.
With Real Luck Group shares currently trading at C$0.11, that gives an implied maximum valuation for the business of around C$770,000.
In return for the shares, Real Luck will receive the target’s proprietary platform and technology, currently offering access to over 6,000 games from 50 suppliers in addition to 100 localised payment methods.
The B2B platform will become an integral part of Real Luck’s business and help enhance the core Luckbox product offering, the firm said.
Real Luck Group CEO Thomas Rosander: “Adding B2B to our proprietary platform has always been a significant part of the Luckbox strategy, and this important acquisition means we will complete this objective almost a year in advance of our projections.
Commenting on the acquisition, Real Luck Group CEO Thomas Rosander said: “Adding B2B to our proprietary platform has always been a significant part of the Luckbox strategy, and this important acquisition means we will complete this objective almost a year in advance of our projections.
“It also extends our opportunities into APAC, a significant region that we currently do not have a presence in and perhaps the largest esports market globally. This transaction ultimately builds our business’ upside by providing immediate access to a large player base.
“This all-stock transaction further validates our strategic growth plan, with both companies sharing a common Luckbox vision. The newly announced acquisition, which is expected to close by the end of the year, will further accelerate our growth and footprint in global markets as we head into 2023 and beyond.”The deal was announced alongside Real Luck’s Q3 financial results.
The business generated just C$38,016 in revenue in the third quarter, though that represented a more than fivefold increase over Q3 2021.
After some C$2m in expenses, the business declared a net loss of C$1.97m for the quarter.
Those figures brought total revenue for the first nine months of 2022 to C$70,484 and net loss for the period to C$6m.
As of the end of the period, Real Luck Group held C$9.5m in total assets, including C$8.8m in cash and cash equivalents.
Commenting on the results, Rosander said: “Q3 was about ramping up our player acquisition initiatives. As reported, our record Q4 key performance indicators are a testament that our scalable plan is delivering above our expectations.
“We are already seeing significant improvements for growth in Q4 2022, as we now focus on driving additional player value, deposits and wagers on our platform.”
Indeed, following the end of the reporting period, the business saw a record number of player registrations in October, coming in at more than 25,000.
The number of active players grew 16-fold from August, the firm said, while stakes placed across all verticals grew 252% in October compared to September.
