M&A Announcement: XLMedia Sells European Gaming Affiliates for $4 Million
XLMedia Completes Divestment of European Gaming Domains with Sale Valued at $4 Million
XLMedia, a major player in the affiliate gaming industry, has successfully completed the sale of three of its European gaming domains and associated websites. The sale of Casino.se, Casino.gr, and Casino.pt to Beach Services has resulted in an upfront cash consideration of $4 million.
This transaction values the assets at 4.7 times their revenue, based on the combined revenue generated by the three websites in 2022, which amounted to $840,000, with a gross profit of approximately $750,000. These brands previously accounted for around 6 percent of XLMedia’s European casino revenue, which reached $14.3 million in 2022.
Despite parting ways with these assets, XLMedia remains committed to operating its gaming business in Sweden and other European markets. The company is pleased with its performance in these regions, which has exceeded management expectations to some extent. The proceeds from the sale will boost working capital and support further investments in expansion efforts within the North American sports and iGaming markets. XLMedia also plans to utilize the funds to enhance its portfolio in the European Union.
This successful divestment follows XLMedia’s decision to sell its unprofitable Personal Finance business, which yielded $2.05 million. These strategic moves reflect the company’s dedication to maximizing returns and optimizing its operations.
In an important shift, XLMedia has recently restructured its business strategy, shifting its focus away from European iGaming markets and towards the thriving US sports betting sector. The outcome has been exceptional, with North American revenue reaching an impressive $47.7 million in 2022, a year-on-year growth rate of nearly 115 percent and accounting for around 65 percent of the company’s total revenue.
The company attributes its success in North America to significant media partnerships established within the United States, including collaborations with globally recognized brands Newsweek and Advance Local. These partnerships have allowed XLMedia to reach diverse audiences across multiple states. Additionally, the company extended its exclusive sports betting and iGaming partnership with Schneps Media in May.
The funds from the sale will contribute to additional working capital and further investment in expanding XLMedia’s North American sports and gaming footprint, as well as advancing its EU portfolio. XLMedia shares are currently trading 12% higher at 10.90 pence each in London.
With a new senior management team in place, including CEO David King and CFO Caroline Ackroyd, XLMedia is confident in its restructured and streamlined operations. The company anticipates a more stable operational base as it concludes its program of change. XLMedia’s North American assets have been integrated into the core business, and Kevin Duffey has assumed the role of President of XLMedia North America.
Looking ahead, XLMedia plans to leverage new AI technologies to enhance its content creation and optimization, providing users with a comprehensive experience. The company’s current trading outlook indicates a strong start to 2023, with the launch of Ohio and Massachusetts, as well as continued exploration of opportunities for expansion in the US iGaming market and revenue-sharing agreements with operators.