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Golden Matrix agrees amended terms for MeridianBet purchase

| By Robert Fletcher
Online game developer and licensor Golden Matrix Group Inc (GMGI) has amended the terms of its proposed acquisition of B2C sports betting and gaming business MeridianBet Group.
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GMGI struck a deal to purchase MeridianBet in January of this year. The original deal was worth approximately $300.0m (£326.2m/€274.8m) and was due to close in the first half of 2023.

However, these terms have now been amended and agreed upon by GMGI and MeridianBet.

Under the restated purchase agreement, cash to be paid by GMGI at closing of the deal was reduced from $50.0m to $30.0m. A further $20.0m in non-contingent cash consideration will be due post-closing.

Stock consideration will be priced at $3 per share, currently an approximate 38% premium to GMGI’s 30-day VWAP closing price. Some 82,141,857 shares of common stock will be due at the initial closing.

GMGI said it is working to obtain the required financing and plans to file the required proxy statement to seek shareholder approval for the acquisition in Q3. 

The amended agreement means the deal now has a value of approximately $331.0m.

Furthermore, the acquisition is now expected to close later, in the third or fourth quarter of 2023. This is subject to certain conditions to closing including GMGI raising required funding and GMGI shareholder approval.

Improved performance

The amended deal comes after MeridianBet increased its year-to-date revenue considerably against last year’s revenue.

Based on year-to-date performance to 31 October 2023, revenue for the combined business post-acquisition is expected hit $139.0m. Adjusted EBITDA is forecast to reach $31.0m. 

“MeridianBet has increased its year-to-date revenues considerably against last year’s revenues,” GMGI chief executive Anthony Brian Goodman said. “MeridianBet’s impressive performance thus far in 2023 gives us even greater confidence in the value of this acquisition. 

“We expect it to bring significant benefits to GMGI from both a financial and operational standpoint. Our management team is confident it will drive long-term value for all our stakeholders.”

Entering the B2C market

Should the deal proceed as expected, the MeridianBet group of companies will become wholly owned subsidiaries of GMGI.

The deal would provide GMGI with access to regulated B2C markets, including in Eastern Europe, while also creating a combined group of profitable and cash-positive companies.

Following the acquisition, GMGI said it expects to be positioned for growth, both organically and through further acquisitions. It also noted synergetic growth opportunities within core markets via the MeridianBet brand and other GMGI B2C brands and market entries.

Headquartered in Malta, MeridianBet operates in a number of markets across Europe, Africa and Latin America.

Wider growth plans

The original agreement came shortly after GMGI acquired the remaining 20% interest in UK-based prize draws brand RKings.

The developer acquired the majority of RKings in November 2021 and said the deal had a positive impact on its performance during Q1 and Q2 of 2022.

In the weeks that followed the MeridianBet announcement, GMGI also reported its full-year results for the 2022 financial year. Revenue was 218.6% higher at $36.0m, while non-GAAP adjusted EBITDA jumped 45.8% to $3.5m.

Speaking at the time, Goodman said its M&A activity would enable the business to grow its global operations, with a particular focus on North America.

“This will significantly advance GMGI’s global footprint with numerous B2B and B2C product offerings on most continents and, we believe, create the opportunity for us to participate in online gambling markets in the US and Canada,” Goodman said.

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