Betsson Group has closed the €33m purchase of Gaming Innovation Group’s B2C vertical, Zecure Gaming Limited, after the transaction was formally approved by antitrust regulators.
Made up of assets, business activities, operations, front-end and middleware technology and gaming licences attributable to the GiG operations, the fee includes a €2m for the cash deposit securing GiG’s Spanish casino license.
As part of the transaction 63 GiG employees and full time consultants are transferred to Betsson, with both firm’s entering a transition service agreement where GiG will offer services to support operations of the brands for an initial period. These services will be invoiced at cost and comprises an additional 54 GiG employees.
The sale also includes the operator brands Rizk, Guts, Kaboo and Thrills and related operational entities, which will continue to be operated on GiG’s platform for a minimum of 30 months.
Subsequently Betsson becomes a long term partner of GiG generating revenues for platform services. For the first 24 months, Betsson will pay a premium platform fee based on NGR generated.
In a media release it was commented: “Betsson’s ambition is to create shareholder value by outgrowing the online gambling market. This transaction further strengthens Betsson’s presence in some of its key strategic markets and opens for further opportunities with new brands in Croatia and Spain.
“Betsson expects the acquisition to increase scale in the business and to unleash synergies, being both revenue and earnings accretive from the second quarter 2020 onwards.”
GiG will use part of these proceeds to repay a SEK 300m 2017 – 2020 bond on 22 April 2020. Through the repayment GiG asserts that the company will achieve a strengthened balance sheet as well as significantly reduce its financial leverage ratio.
Confirming the close of the divestment it was said: “The sale of the B2C vertical is a result of GiG’s strategic review to reduce complexity and improve efficiency. By divesting the B2C vertical, GiG will free up resources, enabling full dedication on driving and growing its B2B business, securing stable and sustainable earnings and profit margins.
“GiG sees a large and sustainable addressable market for its Media and platform business as the regulation of the igaming industry continues and is well positioned with the omni-channel platform offering to capitalise on the continued digital transformation of the worldwide gambling market.”