XLMedia PLC on Thursday said that it signed an agreement to sell its Europe and Canada sports betting and gaming assets to Gambling.com Group Ltd.
XLMedia shares surged 54% to 9.60 pence each on late Thursday morning in London.
The London-based global digital media company said the sales are for a total of up to $42.5 million and represent an uplift to their expected 2023 earnings before interest, tax, depreciation and amortisation.
The sale price includes a fixed sum of $37.5 million and a potential earnout of up to $5.0 million.
XLMedia said the potential total sale price is 6.4 times higher than the estimated adjusted Ebitda for the assets of $6.6 million, and 3.5 times higher than the expected 2023 total adjusted Ebitda of $12.0 million for the whole company.
XLMedia explained that since it launched its North America Sports market presence in 2021, it has evolved to a North American Sports-led business, away from a Europe Gaming-led business. It said that North America Sports represented 65% of revenue in 2022.
Meanwhile, the company clarified that it is as of now not in the process of being fully bought.
The company said: ‘The board confirms it had been in discussions with potential acquirors regarding the possibility of a sale of the whole company, but it was clear while there was demand for the assets, given the prevailing share price, a sale of the whole company was unlikely to create the most value for shareholders.’
Looking ahead, XLMedia said: ‘The near-term focus will be to continue to drive organic revenue growth while improving margins and generating revenues. The group does not have any current plans for acquisition in North America.’
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