Catena initiates strategic review following acquisition interests
Catena Media has acknowledged that there has been interest from third party businesses seeking to acquire some of its assets.
The betting affiliate and publishing group has noted particular interest in its financial trading segment, the ‘Ask Gamblers’ flagship casino brand and ‘certain other’ areas of its global operations.
Addressing the third party interest in its business, Catena’s strategic review will focus on potential transactions, structural changes and other ‘strategic initiatives’ in order to determine its best long-term approach.
The review will consider ‘all feasible alternatives and assets’ to reach an ‘optimal outcome’, assessing potential sales of certain assets and other transactions, not just limited to the AskGamblers brand and financial trading assets.
Having confirmed third party interest, the company was swift to rule out any immediate action, saying: “Catena Media wishes to emphasise that no decision has been taken with respect to the strategic review, and that it may conclude that the best alternative is to make no changes in the near term.”
Publishing its Q1 trading update earlier this week, Catena detailed revenue growth of 11% from Q1 2021, with total group earnings reaching €45.2m (2021: €40.7m).
However, as stated by CEO Michael Daly, the AskGamblers asset set a monthly revenue record in March, but experienced a ‘moderate decline’ throughout the duration of the entire quarter. The group’s entire casino segment also saw revenue decline by 25% to €18.9m (€25.2m).
Despite this, the CEO maintained that: “This remains a robust, high-margin business where we expect ongoing product development investments will deliver positive revenue benefits towards year-end.”
Catena’s Financial Trading division has also encountered ‘challenging conditions’ in comparison to Q1 of the previous year, with revenue from this sector declining by 24% to €0.8m (€1.1m).
Daly added: “Financial Trading is currently expanding its focus beyond first-time users to develop nuanced content capable of attracting more experienced traders and to broaden the offering to commodities such as gold and energy. Over time, this will diversify the customer base and reduce dependency on market conditions.”
In stark contrast to the financial trading and AskGamblers/casino divisions, Catena’s sports betting segment underwent a period of substantial growth during the quarter, recording a revenue increase of 77%.
Total sports betting revenue stood at o €25.5m (€14.4m), accounting for 56% of total group revenue, with North American operations a key growth driver for this division after Catena secured launches in New York and Louisiana.
With more US states and Canadian provinces opening their markets to sports betting, and Catena’s financial trading and AskGamblers units encountering difficulties, the firm may well conclude that a sell-off with funds redirected towards its North American business might be prudent.