Bragg CEO rules out company sale after strategic review conclusion
Matevž Mazij confirms the supplier failed to receive a proposal which “reflected the company’s intrinsic value” as Q3 revenue jumps 15.9% YoY to €26.2m
Bragg Gaming Group has put any sale plans on hold for the foreseeable future following the conclusion of its strategic review into business operations.
The confirmation has seen Bragg’s shares slump by more than 30% to C$4.26 ($3.03) at the time of writing.
The strategic review commenced in March this year, with the company forming a special committee chaired by independent board member Don Robertson.
The firm also enlisted the services of financial advisory firm Oakvale Capital and Toronto-based law firm Blake, Cassels and Graydon to help facilitate the process.
Speaking during Bragg’s Q3 2024 analyst call, CEO Matevž Mazij confirmed the review process had concluded, with the company failing to find a suitable proposal.
Mazij also said the special committee will now be disbanded and that the best path forward to deliver maximum value to shareholders will be the “ongoing execution” of Bragg’s existing strategy.
The CEO noted that both a potential sale of the company or a merger had been explored by the special committee.
Mazij said: “The committee held discussions with over 70 potential counterparties. They executed non-disclosure agreements, shared confidential information with over 25 counterparties and they received multiple non-binding proposals.
“After careful consideration, the special committee and the board unanimously determined that none of the proposals received reflect the company’s intrinsic value or current and projected financial performance.
“As a result, the board has elected to conclude its review and has disbanded the special committee.
“Although the process has now concluded, the board will continue to be open to and consider all opportunities for enhancing shareholder value.”
Later on the call, Mazij said enhancing shareholder value would not be done via a share buyback for the time being, with investments better deployed elsewhere, according to the CEO.
As per the group’s Q3 earnings report, Bragg recorded revenue of €26.2m ($27.7m), representing a 15.9% year-on-year (YoY) increase.
Adjusted EBITDA for Q3 rose 7.1% YoY to €4.1m, with adjusted EBITDA margin coming in at 15.6%, down from 16.9% in Q3 2023.
The firm reported an operating loss of €406,000 for Q3, bettering the €2.1m loss during Q3 2023.
Mazij continued: “With the strategic review process now complete, Bragg is now fully focused on commercialization and unlocking profitable growth, without the need for significant new investment in product development.
“Our decade-long investments in technology and talent, combined with a robust leadership team, have built a scalable platform that uniquely positions us for aggressive growth in 2025 and beyond.
“With significant operating leverage now within reach, we’re poised for an exciting, high-growth and profitable future.”