GIG acquires unnamed affiliate

GIG acquires unnamed affiliate

Friday, February 17, 2017
Deal values digital marketing outlet at €3.5m

Online gaming operator and supplier conglomerate Gaming Innovation Group has announced its latest affiliate marketing acquisition a day after it released its latest results which showed a tripling of yearly revenues.

The €3.5m buyout of a yet-to-be-named affiliate network company strengthens GIG’s digital marketing arm Innovation Labs following a series of bolt-on deals in the last few years including Delta Media and Magenti Media.

GIG said the unnamed acquisition would add around 8,500 annual first-time depositors. It said the network had been in operation for 10 years and generated expected annual revenues of around €1.4m. The company said that the acquisition price represented a multiple of EBITDA of around four times.

In the presentation accompanying this week’s results the company said it expected to access the Nordic corporate bond market within the next year in order to fund further acquisitions. The company didn’t say how much money it would be looking to raise.

The buyout news came in the same week that GIG announced its results for 2016 which showed fourth quarter EBITDA of €3.9m compared with an operating loss of €1.8m in the same period last year and a profit of €1.1m in the third quarter. EBITDA for the year came in at €5.8m.

The annual revenues were boosted by acquisitions throughout the year including the Betit brands which were bought in June last year for €54m. The company said organic growth was 18 percent quarter-on-quarter from existing brands including Guts.com and Rizk.com.

The acquisition spree also extended into the supplier arena where GIG bought up OddsModel early in 2016 and added the offering to its iGamingCloud business. The company said iGC added three new clients over the fourth quarter adding up to a total of 24 agreements. It hopes to be launching a BettingCloud proposition later this year providing proprietary odds feeds, content services, a betting engine, risk management and trading tools.

Innovation Labs referred over 10,000 first-time depositors to both its own brands and external customers in the fourth quarter, up 8 percent from the previous three-month period.

Even with the in-house element of its digital marketing efforts, the total spend on marketing still rose in the quarter to €7m from €5.15m, or a 35 percent increase. However, as a percentage of revenues the marketing spend has decreased from 35 percent in the third quarter and 59 percent in 2015.

Totally Gaming says: These are decent results from Gaming Innovation Group and we can expect more from the company in the year ahead, notably in terms of potential acquisitions. The notice that the company is thinking of seeking finance from the bond market would suggest also that future deals might be more than simple bolt-on acquisitions.

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