Stockholm-listed Betsson is set to continue its ambitious growth plans, by acquiring Gaming Innovation Group (GiG)‘s B2C assets. The deal is worth €31 million (£25.7 million).
Betsson will now onboard GiG’s Zecure subsidiary. This will enable the transfer of all business activities and assets. Operations, technology and gaming licences shall also be moved over.
Consolidation and growth
According to Betsson, this acquisition would allow for consolidation within key markets and growth elsewhere.
Zecure is licensed in the German state of Schleswig-Holstein, plus Malta and the UK. Meanwhile, GiG’s Rizk casino brand has been given the green light to launch in Spain and Croatia.
Pontus Lindwall, Chief Executive of Betsson Group, spoke about how this deal fits in with the company’s broader goals.
“Betsson’s ambition is to outgrow the market in the long term, organically and through acquisitions. This acquisition confirms that Betsson is a driver of the consolidation of the market.
“We believe this deal offers a good opportunity for Betsson to consolidate, at good value, where we can create synergies and apply our core B2C skills and marketing insights to scale these assets to their true potential.”
Details of the deal
Betsson has agreed to keep all of GiG’s existing brands active on the Zecure platform for at least 30 months. The company will pay an initial €22.3m in cash, which is 2.9 times Zecure’s 2019 earnings before interest and tax. That figure was €7.6m.
The Swedish company will also pay a premium fee for the first 24 months, which will be based on net gaming revenue made. Betsson’s sportsbook and payment solutions are also to be integrated to GiG’s platform and could be offered to GiG clients in the future.
The deal still needs to be confirmed by relevant gaming and competition authorities. However, it’s expected to be completed by the end of April 2020.
Richard Brown, Chief Executive of GiG, shared his thoughts on Betsson’s acquisition. Among other things, he looked towards the company’s long-term financial future being secured.
“I am very excited about this transaction as it provides multiple upsides to GiG. While putting the company in a financially sustainable position,” he said. “It gives us the ability to focus on where we see real long-term shareholder value.”
“This transaction serves as a strategic focusing of the company’s efforts towards the B2B segment. Offering both B2C and B2B services had synergies in the past, however, the current conflicting priorities of the two business areas, and increased complexity in the market, have lessened the potential offering on both fronts and our ability to sign new customers.
“I am delighted to retain our brands on the platform and in the process, adding Betsson as a partner as we share the same ambition of responsibility for all stakeholders, safe play for the end user, and an entertaining user experience.”
Betsson recently released its Q4 2019 report, in which it took a 10% hit on its year-on-year revenue.