Gaming Innovation Group (GiG) has signed a share purchase agreement to acquire sportsbook and platform provider Sportnco Gaming for an initial consideration of €50.8m.
Sportnco, which earlier this week rebranded from France Pari to reflect its B2B focus, provides turnkey betting and gaming solutions to operators in regulated markets, with proprietary sportsbook and player account management solutions.
It has a strong presence in its native France, and has also expanded into markets such as Peru, Spain, and Greece. It is partnered with high profile brands such as Betway, NetBet, Casino Gran Madrid, Casino Barcelona, and Peru’s Casino Atlantic City and Olimpo.
It expects to generate revenue in excess of €9m for 2021, with earnings before interest, tax, depreciation and amortisation of around €5m.
GiG said the combined company would strengthen its position as a leading platform and media providers, with an “unparalleled” geographical footprint. Once the deal closes, GiG and Sportnco will be licensed in 25 markets, with around 55 clients.
“Sportnco’s tier one 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,” GiG noted.
The supplier will pay an initial consideration of €50.8m, of which €23.5m will be paid in new GiG shares, and the remaining €27.3m to be paid in cash. GiG will also assume Sportnco’s existing debt of €19.2m, and could pay an earn-out of up to €23m, based on the supplier’s performance in 2022 and 2023.
“We are tremendously excited to welcome Sportnco into Gaming Innovation Group’s product offering,” GiG chief executive Richard Brown commented. “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,” he continued. “Hervé 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.”
Sportnco CEO and founder Hervé Schlosser said the two companies were a “perfect match”, both in terms of product and areas of business, but also through sharing the same corporate values.
“I am excited by the sales potential of our combined offerings,” Schlosser added. “[The] 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.”
To fund the cash consideration of the deal, GiG has entered into an agreement with SkyCity Entertainment Group that will see the New Zealand casino operator invest €25m into the business through a directed share issue.
SkyCity CEO Michael Ahearne said he was excited to expand the operator’s strategic partnership with GiG, which has been in place since 2019, when they paired up to launch an online casino product.
“The partnership has provided SkyCity with access to a complementary and high-growth gaming category and has enabled us to pursue an omnichannel strategy,” Ahearne explained. “The combined GiG/Sportncoo 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.”
Brown said he was delighted to welcome SkyCity as a new shareholder.
“Both companies’ outlook and focus around the ever-evolving digitalisation of gambling is expected to enable strategic gains, with GiG benefiting from decades of retail experience to finetune our offering and SkyCity benefiting from first-hand digital experience that GiG holds, and new opportunities brought about by the transaction with Sportnco.”
The acquisition is expected to close in February 2022, subject to approvals from relevant gaming authorities, shareholder approval to increase GiG’s authorised shares, bondholder approval on the rollover of Sportnco’s loans, and final approval by the GiG board of directors.
