American Gambler will be acquired for a €5m (£4.5m/$5.9m) fee, representing a 3.9x multiple of the business’ projected earnings for 2020, and 3.5x its estimated revenue. As part of the deal, it will also take ownership of several local state assets, into which it will ramp up investment to accelerate growth further.
Through the acquisition, Raketech noted, revenue from the US will reach between 5% and 10% of full-year revenue for 2020.
“The acquisition of American Gambler is an important strategic move for us, shifting the US from a strategic target to a strategic market,” Raketech chief executive Oskar Mühlbach said.
“And by expanding the American Gambler’s service offering to more and more states with the support from our strong core operations team and technology platform, I foresee great opportunities for growth.”
American Gambler founder Alexander Kostin said joining forces with “a larger professional player with a proven track record” was the best choice for his business.
“With this partnership American Gambler have secured both financial muscles and a strong infrastructure in order to become one of the leading brands on the US market,” Kostin said. “I am happy that Raketech identified the potential in American Gambler and gave a helping hand to realize its full potential for years to come.”
The acquisition fee will be settled using cash on hand together with funding raised through the sale of Raketech’s consumer finance assets.
These will be acquired by ROI Media UK, for a total consideration of €4.2m. Raketech noted that this was in line with its strategy of focusing on igaming.
The €4.2m sale prices, it said represented a 4.3x EBITDA multiple, based on the assets’ performance over the past year, and will be broken down into a €3.4m up front fee, then €0.8m paid over the next 18 months.
“The divestment of the consumer finance assets is an important and natural step for us to ensure sharp focus on igaming,” Mühlbach explained. “Furthermore it gives us additional ammunition for growth through M&A – where we see high potential – on strategic markets such as the US.
“In only a few years we have managed to grow our finance assets into one of the key portfolios within its niche, on the Scandinavian market, but I am confident that ROI – with its dedication to the Financial affiliation market – is the right partner to take the assets to the next level.”