Sportradar open to further M&A opportunities following XLMedia deal
CFO Craig Felenstein says supplier will continue to look at adding to its portfolio across technology, content and product, although only if an asset would significantly move the needle
Sportradar CFO Craig Felenstein has said the supplier remains open to M&A opportunities but that any acquisition would have to “change the trajectory” of the business.
Felenstein was talking at Morgan Stanley’s Global Consumer and Retail Conference yesterday, 4 December, when he was asked about the supplier’s priorities regarding what the company does with its cash flow.
In its last latest quarterly financial results, Sportradar reported free cash flow of €122m for the three months ending 30 September, up from €51m in Q3 2023.
Calling it a “high-class problem”, Felenstein said the company’s priority is investing in its existing products, services and opportunities “on the organic side of the house”.
But the CFO did note that the firm was also looking at M&A opportunities should any potential acquisition target move the needle for the New York-listed business.
Felenstein said: “We are looking for M&A opportunities that will augment the growth that we have here on the organic side.
“Now the challenge is that the organic growth is so significant that if you’re going to buy something, it’s got to meet that hurdle rate and it’s very hard to find something that would actually do that.”
Felenstein was then asked whether M&A opportunities would be centred on a specific business segment, or if the company was casting its net as wide as possible.
Last month, XLMedia’s shareholders approved Sportradar’s $30m (£23.2m) acquisition of its North America-facing assets.
The acquisition marks a significant step for Sportradar into the traditional affiliate space as the company will snap up CBWG, Sports Betting Dime and Saturday Football Inc as part of the deal.
The company’s existing ad:s division, which focuses on digital marketing, search and advertising, will now be bolstered by the incoming XLMedia assets.
Felenstein added that while there was nothing of scale that Sportradar could “acquire tomorrow that’s going to change the trajectory of our business”, the company will continue to kick the tyres on potential acquisition targets.
He explained: “I think we’re looking everywhere. You look at the deal we did recently, we bought affiliate capabilities through the acquisition of XLMedia.
“It was a way to round out our ability to acquire customers for the sportsbooks. So that’s about a $20m acquisition with a little bit of an earn out in the next several months.
“There’s nothing of scale that I would say, we can go out there and acquire tomorrow that’s going to change the trajectory of our business.
“But when there’s opportunities to have a product on the betting side or on the advertising side, you’re going to go ahead and do that. [It’s the] same with the technology or services side of the house; anything that kind of fills out your portfolio,” Felenstein concluded.
Sportradar’s shares closed at $17.50 yesterday.