GiG moves to solidify market position with Sportnco acquisition

Gaming Innovation Group (GiG) has confirmed its acquisition of Sportnco, with the aim of strengthening its status as a platform and media provider to the betting and gaming industry.

Full completion of GiG’s takeover of turnkey betting and gaming solutions provider is expected in February 2022, and will enable GiG to leverage the company’s in-house developed sportsbook and PAM products.

The total consideration is set at €50.8 million, of which €23.5 million will be paid in new shares in GiG and €27.3 million in cash. Additionally, GiG will assume existing debt in Sportnco of €19.2 million, whilst there will also be an earn-out option of up to €23 million based on the new acquisition’s 2022 and 2023 performance.

Sportnco estimates 2021 revenues ‘in excess of €9 million’ with EBITDA of around €5 million, whilst the combined entity with GiG will be licensed in 25 markets and have a total of 55 clients, with the latter detailing that its new acquisition’s geographical presence will be ‘highly complementary to GiG’s current offering’.

“GIG and Sportnco really have the perfect match both in terms of product and geographical areas of business but also as they share the same corporate values,” said Hervé Schlosser, CEO and founder of Sportnco.

“I am excited by the sales potential of our combined offerings. Sportnco sportsbook will add strength and attractiveness to the offer of GIG and our mutual PAM solutions will enable us to cover European and American regulated markets for all our existing and future clients.”

GiG further expects the acquisition to create “attractive commercial, operational, and technology synergies, as well as enable cost savings and accelerated growth”.

The transaction is subject to necessary approvals from relevant gaming authorities, shareholder approval to increase the authorised shares in GiG, bondholder approval on the rollover of loans in Sportico and final approval by GiG’s Board of Directors.

Richard Brown, CEO of GiG, added: “We are tremendously excited to welcome Sportnco into the Gaming Innovation Group product offering. The transaction accelerates our long-term vision to become a global leader in the provision of platform, sportsbook and media services to the iGaming industry. 

“The hugely complimentary regulatory profile and high-quality sportsbook that Sportnco have, rapidly expands both companies short and long-term addressable market. 

“Herve and the team at Sportnco have built a fantastic company over the last decade, creating a great product and working in a range of competitive regulated markets and have a proven track record of success. We are very excited to combine the two companies’ offerings and accelerate our growth potential.”

Furthermore, GiG has also announced an agreement with SkyCity Entertainment, which will see the latter company invest €25 million into GiG through a directed share issue at NOK 18.00 per share – this will finance the main part of the cash consideration – subject to the fnal completion of the Sportnco acquisition next year.

SkyCity’s CEO, Michael Ahearne, commented:  “We are excited that SkyCity is expanding its strategic partnership with the GiG team. GiG is an established online operator who we have come to know well since partnering in mid-2019 to launch the SkyCity Online Casino. The partnership has provided SkyCity with access to a complementary and high-growth gaming category and has enabled us to pursue an omnichannel strategy. 

“The combined GiG/SportNCo business will be licensed or certified in over 20 jurisdictions, including growth markets such as the US, Canada and Latin America. We are delighted to support GiG in the financing of the transaction, becoming a major shareholder and helping GiG execute on its strategic vision through representation on the Board. Importantly, the equity investment builds our digital capability and strengthens our strategic alignment with GiG.”

The SkyCity investment is the second major financial backing GiG has secured this month, after Finansinspektionen – Sweden’s Financial Supervisory Authority – approved its prospectus to list SEK 450 million (€45m) in senior corporate bonds on the Stockholm Nasdaq on 8 December.

“We are also delighted to bring on SkyCity as a new shareholder, a company held in high-regard within the land-based segment of the industry,” Brown added. 

“Both companies’ outlook and focus around the ever-evolving digitalisation of gambling is expected to enable strategic gains, with GiG benefiting from decades of retail experience to finetune our offering and SkyCity benefiting from first-hand digital experience that GiG holds, and new opportunities brought about by the transaction with Sportnco.”

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