Nasdaq First North-listed igaming supplier Spiffbet has proposed a deal to move into B2C gaming through a merger with Vrtcl Gaming Group, the company behind the Metal Casino brand.
The merger, which is being recommended by Vrtcl’s board of directors and is already backed by 51.2% of the operator’s shareholders, will see Metal Casino become a subsidiary of Spiffbet.
The shareholders will have the option to exchange each share in Metal Casino for six newly-issued shares in Spiffbet through a non-cash issue. Upon full acceptance of the offer, a maximum of 21,230,954 Spiffbet shares will be issued, amounting to a stake of just over 30% in the business, and valued at approximately SEK10.6m (£870,664/€953,765/$1.0m), based on a share price of SEK0.50 per share.
Spiffbet explained the decision to add a B2C offering to its core B2B business would allow for further growth as well as creating opportunities for a number of synergies. It would be able to reduce overhead costs, such as by migrating Metal Casino to Spiffbet’s solutions, as well as developing exclusive content for the brand.
“This is a strategically important and major step for Spiffbet as we enter the operator market and can also participate in the consolidation within the operator segment,” Spiffbet chief executive Henrik Svensson chief executive explained. “Metal Casino will be a new leg of Spiffbet’s business, which we hope can grow significantly over time.
“It will be a positive addition for everyone who works at Spiffbet, to be able to develop and customise products in direct collaboration with an operator within the same group of companies and to gain access to industry professionals who have direct contact with our end users.”
Metal Casino co-founder Michael Freudenthal noted that the merger would provide the operator with the benefits of a stock exchange listing, something it had been targeting since its launch.
“It has strengthened us tremendously in the ongoing industry consolidation where we intend to be a driving force,” Freudenthal said. “At the same time, we have access to financing in the capital market, which is important if we want to consolidate and strengthen our brand in existing markets while also being able to establish ourselves in new markets.”
Launched in 2017, Metal Casino offers online casino and sports betting in markets such as Sweden, the UK, Germany and Finland, promoted by brand ambassador and former Black Sabbath frontman Ozzy Osborne.
Since its launch it has attracted more than 50,000 depositing customers, that wagered SEK147m (£12.1m/€13.3m/$14.2m) in 2019. Net gaming revenue for that year amounted to SEK26m, and the company posted an operating loss, with its current focus on building its brand and sales.
For the year ahead, it aims to shift focus to profitability, with the ultimate goal of turning a monthly profit by 2021. It also aims to expand into the Asian market in 2020, having launched in Japan late last year.
The deal remains conditional on at least 90% of the holders of all shares and votes in Metal Casino giving it their blessing. The deadline for acceptance is currently 25 March, though Spiffbet noted that this may be extended.
Spiffbet currently holds a B2B licence in Curaçao, and is in the process of applying for a licence from the Malta Gaming Authority. Metal Casino, meanwhile, is powered by Gaming Innovation Group’s Core platform.
