Gambling.com Group acquires XLMedia European assets in $42.5m deal
London-listed affiliate sells Freebets.com, WhichBingo.co.uk and Nettikasinot.com as part of ongoing strategy to focus on North America
Gambling.com Group has acquired XLMedia’s European and Canadian assets, including Freebets.com, in a deal worth up to $42.5m, with a fixed fee of $37.5m.
Alongside Freebets.com, Gambling.com Group will snap up Whichbingo.co.uk and Vedonlyonti.com along with smaller European and Canadian sites as part of the deal.
XLMedia’s decision to shed its assets to Gambling.com Group is part of the affiliate’s ongoing strategy to focus on the North American market.
The $42.5m figure represents approximately 3.5x total expected adjusted EBITDA of around $12m for XLMedia and 6.4x estimated adjusted EBITDA of $6.6m for assets.
The fixed $37.5m is payable in three cash instalments: $20m on the completion of the deal on 1 April 2024, $10m on the six-month anniversary of the closing sale date and $7.5m alongside any earnout consideration, up to $5m, on the one year-anniversary of the closing sale date.
Money raised from the sale will be used to cover asset transition costs, pay the final deferred US acquisition payment and “settle outstanding tax provisions and provide working capital to support the North America business while returning cash to shareholders”.
Marcus Rich, XLMedia chair, hailed it as an “excellent outcome”, noting the sale is twice the market capitalisation of the whole company.
Rich said: “The board believes the sale of these assets, which is approximately two times the current market capitalisation of the whole company, is an excellent outcome for XLMedia and its shareholders.
“Importantly, this transaction will allow the company to clear legacy liabilities, provide working capital and return cash to shareholders.”
Charles Gillespie, Gambling.com Group CEO, added: “This acquisition will provide us with another big brand and assets that complement our existing website portfolio in a number of our key-focus markets, enabling us to drive further growth which is both high margin and highly accretive.
“By operating these assets on our technology platform, we expect to unlock their full potential. We are confident that this latest acquisition will create incremental shareholder value in the same way we have done with previous acquisitions.”
Gambling.com Group said it expects the assets to be accretive to the tune of $10m in revenue and $5m in EBITDA for 2024, with further growth beyond that in 2025.
The sale is the latest for the London-listed affiliate after Beach Services acquired three of its Europe-facing casino assets for $4m last July – its Greek, Portuguese and Swedish sites.
XLMedia also sold personal finance affiliate sites to MPD Media last May in a $1.3m deal.
In December, XLMedia announced it was continuing to explore delivering shareholder value via asset sales while noting it had held early discussions over the full sale of the business as well.