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Acroud completes emerging-market sports betting acquisition

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iGaming affiliate company Acroud AB (formerly Net Gaming) has completed the acquisition of a sports betting business, after signing a letter of intent for the deal on 13 October this year.

The as-yet unnamed business is, according to Acroud, a fast-growing lead generation company in sports betting which is well positioned for emerging markets such as Latin America, Africa and Asia.

The acquisition is expected to accelerate Acroud’s growth in strategic focus areas such as sports betting and emerging markets.

It is comprised of around ten growth websites which will join Acroud’s existing sports betting websites to complete the backbone of its betting offering.

The acquired company has shown rapid growth in 2020, which is expected to continue into 2021 and beyond. Based on its current earning capacity, approximately €0.9-1m has been generated in sales and €0.4-0.5m in EBITDA over the last twelve months.

Acroud will pay €1.5m for 51% of the business upon completion, with a call option of 49% of the business at the end of 2023 or 2025. The call option is based on financial performance for twelve months in 2023 or 2025 with an EBITDA multiple of 3.5x.

The price will be settled in cash from existing reserves (40%) and via own shares (60%). Access of the business took effect yesterday, 17 November 2020.

“This is an important piece of the puzzle in the implementation of Acroud’s strategy to become the ‘media house of the future’ and a fast-growing global challenger in digital comparison and news services,” said Robert Andersson, Acroud’s president and CEO.

“The completed acquisitions, together with other ongoing acquisitions, are transformative for Acroud’s operations and we are now striving to complete them effectively. The acquired business includes world-class SEO expertise and has a solid “track record” of showing strong growth, which will benefit the growth rate in our entire underlying business”.

Earlier this month, Acroud signed another letter of intent to acquire an unnamed “fast-growing US tipster company” for an initial consideration of €2.2m, as it continues its expansion globally.

Also in November, the company signed a further LoI to acquire the igaming assets of online marketing supplier PMG group for €5.5m. The agreement will see Acroud take ownership of the Matching Visions igaming affiliate network, B2B software provider Voonix and affiliate campaign specialist Traffic Grid.

PMG is expected to generate sales of between $10.0m and $11.0m this year. Acroud said that while the acquisition is subject to the two parties entering into a definitive purchase agreement, should this be the case, it expects to complete the deal before the end of 2020.

The company has expressed its intent to expand into the US and Netherlands in 2021, after a “disappointing” Q3 in 2020 saw its revenue and profit fall significantly. Acroud said revenue amounted to €2.38m for the three months to September 30, which was down 31% year-on-year.

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