XLMedia divests European and Canadian assets to Gambling.com Group

Lea Hogg March 22, 2024

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XLMedia divests European and Canadian assets to Gambling.com Group

XLMedia, a leading affiliate group, has announced its decision to sell its European and Canadian sports betting and gaming assets to Gambling.com Group. The deal, worth up to $42.5 million, is part of XLMedia’s strategic shift to focus more on the US market.

The assets being sold include prominent sites like Freebets.com, WhichBingo.co.uk, Nettikasinot.com, and Vedonlyonti.com, among others. Gambling.com Group will pay a fixed sum of $37.5m in cash across three instalments, with an additional earnout of up to $5 million based on performance.

The initial payment of $20 million is expected to be made on completion of the deal, which is slated for 1 April. A further $10 million will be payable at six months, and the remaining $7.5 million, along with any earnout, will be paid on the first anniversary of completion.

Marcus Rich, chair of XLMedia, expressed his belief that the sale, which is approximately two times the current market capitalisation of the whole company, is an excellent outcome for XLMedia and its shareholders. He highlighted that this transaction will allow the company to clear legacy liabilities, provide working capital, and return cash to shareholders.

In 2023, the revenue and adjusted EBITDA attributable to the assets were estimated to be $21.4 million and $6.6 million, respectively. As of 20 March, 2024, the total consideration for the deal represents around 200 per cent of the group’s market capitalisation.

Focus shifts to the US markets

XLMedia will incur transition costs for six months for the migration of technology and will retain cash, debtors, and liabilities. The proceeds from the sale will be used to cover the asset transition costs, pay its final deferred US acquisition payment, settle outstanding tax provisions, and provide working capital to support its business in North America, as well as to return cash to shareholders.

This move follows XLMedia’s sale of three European casino affiliate sites to Beach Services last year. The sites, Casino.se, Casino.gr, and Casino.pt, targeting Sweden, Greece, and Portugal, were sold for $4 million. This series of strategic divestments underscores XLMedia’s increasing focus on the US market.