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In a strategic move to create shareholder value, XLMedia has announced that it will sell the entirety of European and Canadian sports betting and gaming assets to Gambling.com (GAMB) for an initial $37.5m with a potential deferred consideration of $5m.
The announcement of a potential sale came back in December, as the company had been exploring ways to create additional shareholder value. Based on the FY2023 results published by XLMedia in February, $42.5m represents 6.4x the estimated adjusted EBITDA of $6.6m for the assets. Further, the total sum also represents 200% of the group’s entire market capitalisation – as of March 2024.
Aside from covering the transaction costs, XLMedia claims that the proceeds of the sale will be utilised to cover settle outstanding tax provisions, return cash to shareholders and provide working capital to support the North America business.
XLMedia has stated that the sale is a biproduct of the revised strategic direction the affiliate has taken on in recent years, which details an enhanced focus on North American markets. In 2022, North American sports accounted for 65% of the company’s revenue – and the group hopes to expand its footprint, diversify revenue streams and enhance audience relationships in the North American market.
Marcus Rich, Chair of XLMedia, spoke on the sale, stating: “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 legal liabilities, provide working capital and return cash too shareholders.”
