Redundancy costs could hit $13m for XLMedia as part of wind down
Affiliate reveals capital plans as earn-out payments could reach up to $5m following sale of assets to Gambling.com Group and Sportradar
XLMedia is anticipating maximum redundancy payments of $13m (£10.2m) as the affiliate business prepares to wind down following the sale of its North American assets to Sportradar.
Providing an update to the market, the AIM-listed firm confirmed its position as a cash shell company and that were no plans for an acquisition that would constitute a reverse takeover.
In turn, as part of its planned returns to shareholders, XLMedia will make £16m available in the new year via an initial tender offer.
The business said this would represent roughly half of the company’s current market cap and approximately half of the potential total available cash left following costs related to transactions.
XLMedia elected to shutter after selling its Europe- and Canada-facing brands to Gambling.com Group and followed that up with the sale of US affiliate brands to Sportradar.
As of the end of November, XLMedia received gross proceeds of $20m related to the deals, with the business set to receive a further $7.5m in April 2025 related to Gambling.com Group.
XLMedia said it would continue to track the performance of the disposed assets as it manages its expectations around earn-out payments.
Agreed earn-outs will be finalised in late Q1 2025, although XLMedia said they could reach as much as $5m.
In addition, the business has noted it is reviewing the structure of its board while focusing on reducing costs following the asset sales.
Final tax charges are yet to be determined, with XLMedia expecting to pay out between $11m and $13m in redundancy costs.
The firm said: “The group estimates its costs to clear liabilities including deferred minimum guarantee payments, settle tax in each jurisdiction in which it operates, support the transitional service agreements and close down the group, including redundancy payments.”
Marcus Rich, XLMedia independent non-executive chair, said: “The board wishes to maximise the return of value to shareholders while ensuring that the group’s operations are brought to an orderly close, and are reviewing the structure of the board in overseeing the efficient winding down of the group.”