Catena doubles down on UK affiliate space

Catena doubles down on UK affiliate space

Wednesday, December 7, 2016 Posted by Andy McCarron
Digital marketing firm completes another acquisition

The chief executive of Catena Media which last week laid out €10.6m for UK-facing affiliate marketing site casinouk.com said he believed digital marketing would become more important to operators should the UK go ahead with a ban on daytime TV gambling advertising.

Under the terms of the deal announced on 1 December Catena Media acquired a business with annual revenues at a run rate of circa €2.4m and with a margin or around 80 percent.

Robert Andersson from Catena Media told TotallyGaming.com the UK remained a “great market and a big focus for us,” adding that the potential of pre-watershed advertising ban might give the affiliate sector a boost.

“Looking at other markets where it is harder for the operator to advertise, you will see that a larger part of the traffic comes from affiliates, so it might very well be the case that it turns out like that if implemented in the UK,” he said.

“However, there will always be a need for comparison services, even if you are allowed to advertise freely.”

Catena Media has had a busy year in terms of acquisitions. Back in October it bought out the assets of UK-facing social media spots and betting news affiliate SBAT for an upfront €3.2m with a further €7.3m earnout.

In June in separate deals the company snapped up the Swedish-facing sportsbook affiliate Spelbloggare.se for €2.5m and an unnamed the German-focused affiliate for a maximum of €6.5m.

Its biggest deal of the year, though, came in April when it acquired the well-known AskGamblers.com site for €15m. This followed on from the acquisition late last year of the Right Casino affiliate concern.

Catena Media isn’t the only company that has been snapping up affiliate interests in recent months and Andersson said it was a further sign of the market maturing. “As in many other young industries you will start seeing consolidation after a while with a few big players dominating the market,” he said.

The company is seeing the benefits of the acquired businesses. Third-quarter numbers for the three months to September showed total revenues rising 164 percent to €10.7m while new depositing customers rose 192 percent to 56,352. In the nine months to September, revenues rose over 200 percent to €27.8m.

In September, Catena Media issued a three-year €50m bond repayable in 2019. The bond was issued in order to finance further acquisitions. The company listed on Stockholm’s junior exchange Nasdaq First North Premier in February.

Andersson wouldn’t reveal whether further M&A is planned but he did add that the company was “constantly looking to expand into new geographies, regulated environments with high player values are naturally more interesting than the opposite.”

Totally Gaming says: Consolidation within the affiliate marketing space has been one of the themes of this year with Catena Media and Gaming Innovation Group leading the way, not to mention Paysafe’s acquisition of Income Access in September for CAD$40m. It is highly likely we will see more buyouts of the larger affiliate properties in the new year, particularly given that the squeeze is on to acquire new customers in an even tougher trading environment.

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