Last month, Gambling.com Group brokered a deal to buy Freebets.com for between $37.5m (£29.8m/€34.8m) and $42.5m. The final purchase price will depend on future revenue performance.
The affiliate group will pay an initial $20.0m plus an additional $10.0m after six months of owning the business. Between $7.5m and $12.5m is due one year after completion, subject to revenue performance in 2024.
Gambling.com Group expects Freebets.com to generate an additional $10.0m in revenue during the current year, as well as $5.0m in incremental adjusted EBITDA.
It is funding the deal with existing cash, borrowings under its new credit facility and future cash flow.
Acquisition will “fundamentally” change power balance in Europe’s affiliate market
Charles Gillespie, CEO and co-founder of Gambling.com Group, said the deal demonstrates commitment to Europe, alongside its US expansion efforts. He also said it will significantly impact the European affiliate market as a whole.
“While expansion of gambling in the US grabs all the headlines these days, many of the industry’s most attractive markets remain in Europe, the historical home of the industry,” Gillespie said.
“I expect this acquisition to fundamentally change the balance of power within the European online gambling affiliate market. It will provide Gambling.com Group with a clear path to drive further growth in both our existing European markets as well as new ones.
“As part of the transaction, we are gaining a number of new colleagues in the region. I look forward to sharing our leading technology platform and high-performance culture with our new team members.”
Gambling.com Group revels in 2023 growth
The acquisition was announced alongside Gambling.com Group publishing full-year results for 2023. The year proved a successful one, with revenue rising 42.1% to $108.7m.
Stand-out highlights for the group in 2023 included the launch of the Casinos.com domain. It also struck up a new partnership with UK media publisher The Independent. All of this, the group said, contributed to revenue growth.
Accompanying a rise in revenue was net profit of $21.1m, in contrast to a $2.4m loss in 2022. In addition, adjusted EBITDA for the year was 52.3% higher at $36.7m.
High hopes for 2024
Given its positive performance in 2023 and the new acquisition, Gambling.com Group is optimistic about its prospects for 2024.
Revenue is set to be between $129.0m and $133.0m, the midpoint of which would be 20.5% ahead of 2023. As for adjusted EBITDA, the forecast range is $44.0m to $48.0m, with the midpoint 25.3% higher year-on-year.
This guidance, the group said, assumes no other US markets will open in 2024. It also said it makes the assumption it will not benefit from new acquisitions besides Freebets.com. This suggests Gambling.com Group will be quiet on the M&A front for the rest of the year.
Original article: https://igamingbusiness.com/strategy/ma/gambling-com-group-completes-freebets-com-acquisition/
