Betsson Group to acquire GiG’s B2C assets

Betsson Group to acquire GiG’s B2C assets

Gambling operator Betsson has brokered a deal to purchase Gaming Innovation Group’s (GiG) B2C assets, including the Rizk, Guts, Kaboo and Thrills brands, for €31m (£25.7m/$33.6m).

Published 17th February 2020

Under the share purchase agreement, Betsson has committed to keeping all of the brands operational on GiG’s platform for at least 30 months. For the first 24 months, Betsson will pay a premium platform fee based on net gaming revenue generated.

Based on the expected platform fees set out in the agreement, the total value of the deal is estimated to be worth approximately €50m.

Betsson will pay a total of €22.3m in cash, as well as a prepaid platform fee of €8.7m to, acquire the assets, with GiG set to use the proceeds from the sale to repay its SEK300m 2017 to 2020 bond.

The sale is expected to go through before the end of April this, though the deal remains subject to approval from compulsory regulatory approvals from merger control and gaming authorities.

“We believe this deal offers a good opportunity for Betsson to consolidate, create synergies and apply our core B2C skills and marketing insights to scale these assets to their true potential,” Betsson chief executive Pontus Lindwall said.

“The agreement with GiG further strengthens and expands Betsson’s outreach and growth potential for its proprietary sportsbook and payments platforms in the B2B market.

“A key strategy is to grow our sportsbook with B2B customers and I am excited to collaborate with GiG as a distribution channel.”

The sale forms part of GiG’s strategic review, which was initiated in November of 2019 in an effort to reduce complexity and improve efficiency. By divesting the B2C vertical, GiG said this will free up resources and as a result allow it to focus on securing stable and sustainable earnings and profit margins for its B2B arm.

Also part of the strategic review, GiG has taken the decision to make its technical platform sportsbook agnostic and partner with other sportsbook providers to offer enhanced solutions to its customers. GiG said it is intended that Betsson’s sportsbook solution will be integrated on GiG’s platform offering.

According to GiG, both it and Betsson will gain strategic advantage in having the option to sell their respective B2B solutions in an environment without conflict of their own B2C brands.

In addition, GiG said it will seek joint ventures or other constellations with more partners to further enhance its sportsbook and to secure external long-term funding.

GiG chief executive Richard Brown said: “I am very excited about this transaction as it provides multiple upsides to GiG. While putting the company in a financially sustainable position, it gives us the ability to focus on where we see real long-term shareholder value.

“This transaction serves as a strategic focusing of the company’s efforts towards the B2B segment. Offering both B2C and B2B services had synergies in the past, however, the current conflicting priorities of the two business areas, and increased complexity in the market, have lessened the potential offering on both fronts and our ability to sign new customers.

“I am delighted to retain our brands on the platform and in the process, adding Betsson as a partner as we share the same ambition of responsibility for all stakeholders, safe play for the end user, and an entertaining user experience.

“I am certain that together with their speciality, focus and strong track record on driving B2C growth, it will be a fruitful partnership.”