ASX-listed betting supplier BetMakers has agreed to acquire ABettorEdge Pty Ltd, trading as Punting Form, in a deal worth up to A$20m.
Punting Form uses proprietary IP and artificial intelligence to create sectional times and benchmarks for horse racing, which are used to create time-based rating systems.
Sectional times are the times taken for each horse to complete a section of a race, usually a furlong. Punting Form is currently used by professional betting syndicates, betting operators, content creators and form analysts globally, BetMakers said.
The supplier’s products form an integral part of data requirements for professional horse racing participants, it added.
BetMakers intends to use the sectional times in conjunction with its own technology to deliver enhanced features such as more accurate pricing, speed maps, runner comments and integrity benchmarking.
The firm said it will integrate Punting Form services and data across all of its operating divisions with an immediate focus on its Managed Trading Services division, to allow for pricing improvements across its ratings engine.
Punting Form will also expand its current services to include sectional time ratings for horse racing in North America and other global jurisdictions including New Zealand, the UK and Ireland, as well as adding other racing formats such as greyhound and harness racing.
BetMakers CEO Todd Buckingham: “The synergies across our business are exceptional with both internal use and our external client base benefiting greatly from this acquisition. The team at Punting Form are very experienced in delivering B2B wagering solutions and we are excited to have them onboard at BetMakers.”
BetMakers said the acquisition is strategically important across several of its business segments. In addition to improving the back-end tools, pricing and trading margins associated with its Global Betting Services, it will also drive more liquidity in its Global Tote offerings, it said.
The deal will also improve pricing and confidence in overseas content through BetMaker’s Global Racing Network and will ensure BetMakers’ proprietary ratings engine is powered with the best available data for US fixed-odds racing, facilitating a shift for tote operators to move into fixed-odds wagering, according to the supplier.
Upon completion, which is expected by the end of 2022, BetMakers will pay an initial consideration of A$3m in cash to Punting Form’s current owners, Hong Kong-based JJ Ventures Ltd and Hkelly Holdings Ltd.
A further A$3m will be payable upon the successful rollout of Punting Form technology to the US market, for a total of A$6m payable in the first year of the deal.
The remaining A$14m can be earned by Punting Form’s sellers depending on the delivery of incremental revenues and profits, with $5m to be paid at the end of years one and three and A$4m payable in year two.
After the initial A$3m cash consideration, all subsequent payments may be made in cash or BetMakers stock at BetMakers’ discretion.
“Sectional Times are at the forefront of any ratings system and required by any serious ratings engine,” said BetMakers CEO Todd Buckingham.
“The synergies across our business are exceptional with both internal use and our external client base benefiting greatly from this acquisition. The team at Punting Form are very experienced in delivering B2B wagering solutions and we are excited to have them onboard at BetMakers.”
BetMakers’ share price tumbled on Friday (21 October) after B2B gambling industry venture capital firm Waterhouse VC offloaded some 10 million shares in the business, generating around A$11.4m in the process, according to The Motley Fool.
Shares in the firm are currently down some 60% in 2022 to-date.
ASX-listed betting technology supplier BetMakers has unveiled plans to conduct an on-market share buyback of up to 10% of the company’s total listed shares.
The buyback is expected to commence on 12 July and will be funded from BetMakers’ existing cash reserves.
The buyback will be conducted under the Australian Corporations Act’s “10/12 limit”, which allows businesses to buy back up to 10% of the smallest number of shares issued at any time during the last 12 months, without shareholder approval.
“We continue to take a disciplined approach to capital allocation, discerning between opportunities to invest for future growth, and we are constantly looking at methods of returning value to shareholders both organically and inorganically,” said BetMakers CEO Todd Buckingham.
“As a business we have signed and announced deals that we believe will give the company strong organic growth in FY23 and we expect this momentum to continue.
“BetMakers is in a strong financial position with our improving cash flow and with current market dynamics providing us with an opportunity to maximise shareholder value via a buyback,” Buckingham concluded.
BetMakers CEO Todd Buckingham: “BetMakers is in a strong financial position with our improving cash flow and with current market dynamics providing us with an opportunity to maximise shareholder value via a buyback.”
There are currently 903.5 million shares issued in BetMakers, meaning the business will be able to buy back upwards of 90 million shares. At the firm’s current share price of A$0.38, the total buyback could be worth as much as A$34.3m.
BetMakers shares have traded as high as A$0.78 this year, before the price began to decline rapidly from an April peak. The stock’s 52-week high saw shares trade as high as A$1.42 during 2021.
The April rally in BetMakers’ share price was likely helped by the announcement of an agreement between the operator and media giant News Corp to launch a new Australian sports betting operator.
BetMakers was selected as the technology partner of the new venture, which will be backed by a consortium of investors associated with Australian bookmaking legend Matthew Tripp, as well as Las Vegas-based online gambling investment fund Tekkorp Capital. Tekkorp is also a major shareholder in BetMakers.
The 10-year exclusive agreement with News Corp’s new venture could bring the company upwards of A$300m in revenue, it said.