Novibet to go public on Nasdaq in $696m SPAC merger

Novibet has reached an agreement with special purpose acquisition company (SPAC) Artemis Strategic Investment Corporation to go public on Nasdaq.

The Malta-headquartered operator has struck a deal whereby Artemis will merge into a new wholly owned subsidiary of Novibet in an initial $625m transaction.

The proposed transaction has been unanimously approved by both boards and is expected to close in H2 2022, subject to approval by Artemis shareholders and closing conditions.

When the deal completes, Novibet shares will be listed on Nasdaq and Artemis founders and existing Novibet stakeholders will hold approximately 75% of the combined company.

On a pro forma basis, the implied enterprise value of the transaction is approximately $696m, assuming there are no redemptions from Artemis shareholders.

Artemis, an Arizona-based blank check company, will provide around $205m of cash-in-trust and Novibet’s shareholders will roll at least 92% of their equity into ordinary shares of the combined public company.

Novibet owner Rodolfo Odoni will be named chairman of Novibet PLC while current chief executive Georgios Athanasopoulos will stay on as CEO.

Novibet’s sole shareholder will then have the option to receive cash in exchange for up to $50m in Novibet shares, subject to there being at least $100m of transaction proceeds after redemptions.

Artemis co-CEO Holly Gagnon: “Novibet has a strong record of success developing a superior technical platform to address the global iGaming opportunity in a manner that delivers profitable financial performance.”

Novibet was founded in 2010 and currently operates both iGaming and online sports betting in four regulated European markets; Greece, Ireland, Italy and Malta.

It pulled out of the UK in February, however, surrendering its licence to the Gambling Commission due to the competitive and costly nature of doing business in the market.

Novibet has outlined a multi-pronged growth strategy as rationale for the transaction.

It plans to use the proceeds to grow market share in existing core markets and enter further European markets, including Sweden, Romania, Belgium, Hungary, Germany, France, Spain and the Netherlands, either through joint ventures or targeted M&A.

Crucially, the SPAC merger will allow Novibet to enter both emerging and regulated marketd across North America and Latam, tapping into an estimated $37bn+ TAM opportunity across the US and Canada by 2026.

The business has entered into market-access agreements for iGaming in Pennsylvania and is finalising market-access deals for six additional US states, while also seeking a direct licence to operate in Ontario.

Below the border, Novibet is in the final stages of negotiating a market-access agreement in Mexico and is hoping to enter Peru, Chile, Brazil, Colombia and Argentina in the future.

Management has said it will pursue a return-focused M&A strategy to acquire complementary operators to further diversify its sources of revenue and grow cash flow.

This strategy is expected to result in full-year 2023 projected NGR of approximately $200m and EBITDA of approximately $37m.

“Novibet has a strong record of success developing a superior technical platform to address the global iGaming opportunity in a manner that delivers profitable financial performance and positive cash flow,” said Artemis chairperson and co-CEO Holly Gagnon.

“This record, combined with its demonstrated ability to successfully and profitably enter new markets as well as the significant opportunity to leverage its competitive advantages in new markets, including in North America, aligns with our original investment thesis and makes Novibet an ideal partner for Artemis.

“Over the last three years, Novibet has consistently grown iGaming and sports betting users while also increasing the number of bets or hands played per user, resulting in a nearly 69% increase in the 12-month value of each user to $617 in 2021 when compared to 2019.

“We are confident that Novibet’s proven, efficient, digital-focused customer acquisition strategy and depth of content offerings will enable it to deliver continued profitable growth as it launches its North American offerings beginning early next year,” she added.

Approximately 68% of Novibet’s 2021 NGR was derived from iGaming, with the remainder from online sports betting.

The operator owns a proprietary vertically integrated tech platform and attracted more than 350,000 annual unique active customers in 2021.

Novibet CEO Georgios Athanasopoulos: “We believe our execution will result in consistent cash flow growth which, combined with our new access to the US financial markets, will help us to continue to invest in growth opportunities and drive significant long-term shareholder value.”

Novibet is now poised to launch its first North American offering in Canada by the end of 2022, with Pennsylvania (iGaming) and New Jersey (iGaming and sports betting) set to follow in 2023.

“Novibet has always focused on generating revenue growth that delivers positive cash flow,” said George Athanasopoulos, CEO of Novibet.

“As we move closer to launching in additional markets where we can leverage our product and technology advantages, that focus will not waver. Our proposed combination with Artemis will enable us to both accelerate growth in our existing markets and efficiently enter newer markets.

“We see a significant growth opportunity in North America as our planned launch of operations in the US, Canada and Mexico will significantly grow our TAM with our expected initial market-access agreements for seven states enabling us to reach 14% of the US population,” he added.

Athanasopoulos said the company will have $135m of unrestricted cash when the deal completes to target accretive acquisitions.

“We believe our execution on these strategies will result in consistent cash flow growth which, combined with our new access to the US financial markets, will help us to continue to invest in growth opportunities and drive significant long-term shareholder value,” he added.

Oakvale Capital acted as exclusive financial advisers to Novibet while Barclays acted as exclusive financial and capital markets advisers to Artemis.