Better Collective acquires Atemi Group for £40m

Under the agreement, Better Collective will pay £32.5m upfront for the pay per click specialist, in a combination of £27.8m in cash and £4.7m in Better Collective shares. The remaining £7.5m will be paid in equal quarterly deferred payments until the end of 2021.

The affiliate giant last month said it had signed a letter of intent to acquire an unnamed igaming business for approximately €45m, with the aim of enhancing its lead generation capabilities.

Better Collective said the acquisition is a major strategic move with significant synergistic opportunities, adding that it provides the business with additional channels of traffic to convert potentially high-spending customers into bettors.

The affiliate giant also said that it will now be able to access major social media platforms, with Atemi being an approved advertiser on Facebook and Instagram, as well as combine its own assets in organic traffic acquisition, sports betting and paid media with those of Atemi.

The acquisition, Better Collective said, will also help it to expand into new markets, including the US, while its partners will have access to a higher number of new depositing customers (NDCs).

“This acquisition is a very important step for us to reach our strategic target of becoming the leading sports betting aggregator in the world,” Better Collective chief executive Jesper Søgaard said.

“It will immediately bring Better Collective in the absolute leading position when in comes to customer acquisition for the online operators, with an estimated annual NDC level of more than 600,000.

“From a financial perspective, Better Collective will take a leap of having proforma annual revenue of estimated more than €120m with high operational earnings and cash flow.”

Founded in 2015, Atemi specialises in paid media and social media advertising, counting the likes of Google, Microsoft Bing, Facebook and Instagram among its distribution channels others.

In 2019, Atemi generated a total of €33m in revenue, with an organic growth of 70% compared to 2018. For the current year, Atemi is on course to send more than 180,000 NDCs to its partners, has set a revenue target of more than €40m and operational earnings of approximately €8m.

iGB spoke to Atemi founder Richard Skelhorn this morning, who called it a great deal for Better Collective.

“There’s virtually no crossover between the businesses, which is rare for a deal of this nature,” Skelhorn said. “They [Better Collective] are mostly sports betting, we are predominantly casino. They are heavily in Scandic and German markets, we are UK focused.

“In order to rank and really scale these days, you need to be able to buy media, it’s increasingly difficult to do this through SEO alone.”

Skelhorn said he would be taking some time out before turning his attention to the launch of five more start-ups, some touching on the gaming space but not in affiliation.

“I have been an affiliate for nearly 20 years, as I started back in 2001,” he said. “When everyone else was at university I was working hard on building up my businesses, from starting my first casino affiliate site with just £400 on my credit card limit and no outside investment.”

Better Collective added that its financial targets for 2020 remain unchanged, after last month reporting a year-on-year increase in revenue and net profit for the first half of the year, despite the impact by the novel coronavirus (Covid-19) pandemic on the business.

Revenue for the six months to 30 June amounted to €36.2m, up 17.7% on the previous year, while net profit for the period reached, €8.6m, an increase of 16.2%.

Atemi also this month posted positive financial results for its second quarter, during which it achieved a record $13.3m in revenue that was 42% higher than the same period last year.