In a bold expansion maneuver within the digital gambling affiliate market, Gambling.com Group has successfully sealed the terms for the acquisition of Freebets.com. The transaction, comprising an overall payout ranging from $37.5 million to $42.5 million, is contingent on the future revenue benchmarks of the business.
Upon completing the acquisition, Gambling.com Group will make an upfront payment of $20 million, succeeded by an additional installment of $10 million at the half-year mark. A subsequent sum between $7.5 million and $12.5 million will be disbursed following the one-year anniversary of the deal, tied directly to the revenue performance of Freebets.com in 2024.
The anticipated revenue boost from this acquisition is a considerable $10 million for the current year, along with an estimated $5.0 million increase in adjusted EBITDA. To finance this undertaking, Gambling.com Group is utilizing a blend of existing cash reserves, new credit facility borrowings, and projected future cash flows.
Charles Gillespie, CEO and a founding member of Gambling.com Group, expressed that this move underscores the Group’s commitment to strengthening its European market presence in parallel to its U.S. expansion initiatives. Gillespie remarked, “While expansion of gambling in the U.S. grabs all the headlines these days, many of the industry’s most attractive markets remain in Europe, the historical home of the industry.”
He also projected that the acquisition would trigger a transformative shift in the power dynamic within the European online gambling affiliate landscape, furnishing Gambling.com Group with avenues to drive accelerated growth across existing and new European territories. In the wake of the transaction, Gillespie welcomed the new regional team members, eager to integrate them with the Group’s cutting-edge technology platform and performance-driven culture.
The acquisition announcement was timed with the release of Gambling.com Group’s full-year financials for 2023, which painted a picture of strong fiscal health. The group saw a 42.1% rise in revenue, totaling $108.7 million. Significant contributors to this positive trajectory included the launch of the Casinos.com domain and a freshly inked partnership with UK’s media giant, The Independent, both of which played a pivotal role in the revenue surge.
This financial upswing extended to net profits as well, with Gambling.com Group reporting a $21.1 million profit, a stark turnabout from the $2.4 million loss seen in the previous year. Moreover, adjusted EBITDA for the year enjoyed a 52.3% increase, reaching $36.7 million.
Building on the success realized in 2023 and with the Freebets.com acquisition in their portfolio, expectations for 2024 are set high. The Group forecasts revenue to touch a range between $129.0 million and $133.0 million, which would represent a 20.5% increment from the preceding year. Adjusted EBITDA is also projected to rise, with forecasts ranging from $44.0 million to $48.0 million, indicating a 25.3% increase year-over-year.
This forward outlook is based on the presumption that no additional U.S. markets would open up in 2024 and that no further acquisitions, other than that of Freebets.com, would contribute to the Group’s financial performance. This outlook suggests that Gambling.com Group may not engage in further mergers and acquisitions for the remainder of the year, thus consolidating their current position and focusing on internal growth and optimization stemming from the recent acquisition.
