GiG sells B2C brands to Betsson in €31m platform-led deal

Gaming Innovation Group (GiG) has reached a share purchase agreement with Betsson Group to sell its B2C assets to the Malta-headquartered operator for €31m.

The sale will include brands Rizk, Guts, Kaboo and Thrills, and will see Betsson become a long-term partner of GiG.

Under the terms of the deal, Betsson will make a €22.3m cash payment for the acquisition, plus a prepaid platform fee of €8.7m.

GiG will use the proceeds to repay the company’s SEK300m 2017-2020 bond, a credit facility it first agreed in 2019.

Betsson will keep the acquired B2C brands on the GiG platform for a minimum period of 30 months. During the first 24 months of this period, the company will pay a premium platform fee based on net gaming revenues generated.

After all fees are paid, the expected total cost of the transaction is expected to be approximately €50m. In addition, the Betsson Group sportsbook platform will be integrated onto the GiG platform as part of the agreement.

The transaction is expected to complete in mid-April 2020.

Pontus Lindwall, Betsson CEO, said the deal was a good opportunity for Betsson to “consolidate, create synergies and apply our core B2C skills and marketing insights to scale these assets to their true potential”.

“The agreement with GiG further strengthens and expands Betsson’s outreach and growth potential for its proprietary sportsbook and payments platforms in the B2B market,” Lindwall added.

Richard Brown, GiG CEO, highlighted the transaction as providing “multiple upsides” to GiG, allowing the company to be in a financially sustainable position.

“I am delighted to retain our brands on the platform and, in the process, adding Betsson as a partner as we share the same ambition of responsibility for all stakeholders, safe play for the end user, and an entertaining user experience.

“I am certain that together with their speciality, focus and strong track record on driving B2C growth, it will be a fruitful partnership,” Brown added.

Addressing the decision to end its association with the B2C market, Brown said: “Offering both B2C and B2B services had synergies in the past, however, the current conflicting priorities of the two business areas, and increased complexity in the market, have lessened the potential offering on both fronts and our ability to sign new customers.”

In addition to confirming the deal, GiG revealed that its full-year 2019 revenues hit €123m, with Q4 2019 revenues of €29.4m and an EBITDA of €14.1m.