GiG eyes sportsbook gains with €50.8m Sportnco acquisition

Gaming Innovation Group (GiG) has acquired sportsbook platform and media supplier Sportnco in a €50.8m (£43.1m) cash-plus-shares deal.

The Malta-headquartered B2B supplier will pay a combination of €27.3m in cash and €23.5m in new shares issued in the GiG business.

In addition, GiG has agreed to assume Sportnco’s existing debts of €19.2m as part of the deal, which includes an earn-out component of €23m, based on Sportnco achieving performance-related targets in 2022 and 2023.

“Combined, GiG and Sportnco will be licensed in 25 markets, currently with around 55 clients, as Sportnco’s geographical presence is highly complementary to GiG’s current offering,” GiG said in a statement confirming the deal.

“Sportnco’s tier-one sportsbook product is strong, and the acquisition is expected to create attractive commercial, operational, and technological synergies, as well as enable cost savings and accelerated growth,” the firm added.

Sportnco is expected to generate 2021 revenue in excess of €9m with a company EBITDA expected at €5m.

Closing is expected in February 2022 and is subject to regulatory approval, shareholder approval to increase the authorised shares in GiG, bondholder approval on the rollover of loans in Sportnco, and final approval by GiG’s board of directors.

GiG CEO Richard Brown welcomed the addition of Sportnco to GiG’s B2B arsenal, suggesting the transaction would “accelerate” the firm’s vision to become a global B2B igaming supply business.

“The hugely complementary regulatory profile and high-quality sportsbook that Sportnco have rapidly expands both companies short- and long-term addressable market,” Brown explained.

“Herve [Sportnco CEO and founder Herve Schlosser] and the team at Sportnco have built a fantastic company over the last decade, creating a great product and working in a range of competitive regulated markets and have a proven track record of success.

“We are very excited to combine the two companies’ offerings and accelerate our growth potential,” Brown added.

In a connected transaction, GiG has entered into an agreement with New Zealand-based retail gambling operator SkyCity Entertainment Group, whereby SkyCity will invest €25m into GiG through a directed share issue at a price of NOK18.00 per share.

These investment monies will be used by GiG to finance the cash part of the Sportnco deal.

Referencing the deal with SkyCity, Brown said he was “delighted” to bring on the land-based business as a shareholder.

“Both companies’ outlook and focus around the ever-evolving digitalisation of gambling is expected to enable strategic gains, with GiG benefiting from decades of retail experience to finetune our offering and SkyCity benefiting from first-hand digital experience that GiG holds, and new opportunities brought about by the transaction with SportnCo,” Brown added.