Gaming Innovation Group Inc (GiG) has signed a share purchase agreement to acquire igaming company Sportnco Gaming SAS for an initial cash and share consideration worth $57.5m.
Sportnco is cited by GiG as one of the leading platform providers of turnkey betting and gaming solutions for operators in regulated markets through its in-house developed sportsbook and PAM.
In today’s statement, GiG predicted that the combined company will enhance and strengthen its position as “one of the industry leading platforms and media providers” while creating one of the largest and fastest growing providers in regulated igaming.
Combined, GiG and Sportnco will be licensed in 25 markets, currently with around 55 clients, as Sportnco’s geographical presence is considered highly complementary to GiG’s current offering.
According to GiG, Sportnco’s tier 1 sportsbook product is strong, and the acquisition is expected to create attractive commercial, operational, and technological synergies, as well as enable cost savings and accelerated growth. Sportnco is estimating revenues for 2021 in excess of $10.2m with an EBITDA around $5.7m.
The initial consideration of $57.5m will comprise $26.6m in new GiG shares and $30.9m in cash. In addition, GiG will assume existing debt in Sportnco of $21.7m and there will be an earn-out of up to $26m based on Sportnco’s performance in 2022 and 2023.
GiG has also entered into an agreement with SkyCity Entertainment Group Limited, whereby SkyCity will, subject to final completion of the acquisition, invest $28.3m in GiG through a directed share issue that will finance the main part of the cash consideration.
Closing is expected in February 2022 and is subject to necessary approvals from relevant gaming authorities, shareholder approval to increase the authorised shares in GiG, bondholder approval on the rollover of loans in Sportnco, and final approval by GiG’s Board of Directors.
Richard Brown, CEO of GiG said: “We are tremendously excited to welcome Sportnco into Gaming Innovation Group product offering. The transaction accelerates our long-term vision to become a global leader in the provision of platform, sportsbook and media services to the igaming industry.
“The hugely complimentary regulatory profile and high-quality sportsbook that Sportnco have, rapidly expands both companies short- and long-term addressable market. Hervé (Schlosser, CEO and Founder) and the team at Sportnco have built a fantastic company over the last decade, creating a great product and working in a range of competitive regulated markets and have a proven track record of success. We are very excited to combine the two companies’ offerings and accelerate our growth potential.”
Schlosser added: “GIG and Sportnco really have the perfect match both in terms of product and geographical areas of business but also as they share the same corporate values. I am excited by the sales potential of our combined offerings. Sportnco sportsbook will add strength and attractiveness to the offer of GIG and our mutual PAM solutions will enable us to cover European and American regulated markets for all our existing and future clients.”
SkyCity CEO Michael Ahearne said: “We are excited that SkyCity is expanding its strategic partnership with the GiG team. GiG is an established online operator who we have come to know well since partnering in mid-2019 to launch the SkyCity Online Casino.
“The partnership has provided SkyCity with access to a complementary and high-growth gaming category and has enabled us to pursue an omnichannel strategy. The combined GiG/SportNCo business will be licensed or certified in over 20 jurisdictions, including growth markets such as the US, Canada and Latin America.
“We are delighted to support GiG in the financing of the transaction, becoming a major shareholder and helping GiG execute on its strategic vision through representation on the board. Importantly, the equity investment builds our digital capability and strengthens our strategic alignment with GiG.”