Raketech sells non-core US advisory business to focus on ‘core strengths’

Sold sign
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Online affiliate and content marketing firm Raketech Group has agreed to divest its non-core US advisory business to focus on its “core strengths”.

The company remarked that total sale proceeds of $2.25m have been settled partially on closing and via an ongoing revenue share agreement.

ATS Consultants, acquired by Raketech in December 2021, features several “high-value lead-generating” sports tipster websites which the company says are “highly dependent on a manual lead conversion sales team”.

Raketech noted that traffic has increased to its US tipster sites over the past year, transitioning from a “manual, high-touch process” business model to a “fully digital lead conversion model for multi-capper picks and predictions”.

A comprehensive review of US business operations and assets was undertaken following this success, of which the conclusion was to divest the high-touch US tipster advisory sales business. The tipster advisory operations are being sold to its management.

The company stated that the sale aligns with its strategy to “focus on its core digital strengths and maximise growth opportunities” but it will continue to leverage flagship US assets – winnersandwhiners.com, statsalt.com and picksandparlays.com – which generate approximately 50 million sessions annually.

Johan Svensson, who was appointed CEO of Raketech back in May, commented: “This strategic sale is an important step in streamlining our operations and focusing on our core strengths.

“By leveraging our high-quality US operations, our strategy is to maximise the growth potential in digitalised subscription and affiliate marketing revenues and expand our sub-affiliate marketing and partnership revenue streams. 

“Despite the one-off non-cash impairment charge, we are confident that this move will enhance our focus, drive improved performance, and deliver long-term sustainable growth and value creation.”

The US business operations and assets review was completed in Q2 2024. Raketech stated that it “highlighted the significant potential for US digital subscription revenues and opportunities to increase affiliation revenues” from its high-value tipster website assets.

In addition, the company said that “strong traffic development has led to a significant increase in MCP sales and higher affiliation marketing revenue from leading US sportsbook operators” and that the review “identified the underperforming high-touch advisory operations as increasingly non-core and subscale”.

Raketech noted that revenues for the 12 months to the end of Q1 2024 from these operations were $4m with minimal EBITDA contribution. It has also signed an exclusive lead generation agreement guaranteeing a minimum fee of $250,000 over the next year.

With the transaction expected to close by August 31, 2024, the sale will also have a one-off non-cash impairment charge of approximately €10m for the US assets.