XLMedia PLC (LON:XLM) said it has made a significant step in its expansion into the US sports market with the acquisition of sports gaming and betting business CBWG Sports.
The digital marketing firm said it will pay US$12mln in cash and issue around 7.9mln new shares upfront for the purchase, while there is also the potential for additional payments of US$9.5mln based on net revenue performance at CBWG in the three years to the end of 2023.
READ: XLMedia remains focused on repairing Google deranking damage
Based in the northeast US, CBWG owns and operates six sports betting and gaming websites and already has agreements in place with leading regulated online sportsbooks around the country.
It is registered as a sports gaming affiliate in six states, including New Jersey and Pennsylvania, while it also has an agency arm which partners with sports media brands to drive user acquisition in the betting markets of Colorado, Illinois, and Tennessee.
Over the 12 months to end October, CBWG reported earnings (EBITDA) of around US$2.7mln and revenues of US$4.6mln.
"It is great to have acquired such an attractive set of assets during an inflection point for the US Sports betting market. On some estimates, almost 60% of the US population is set to have legal access to sports betting by the end of 2022 - this could include New York, where one of the key assets, EliteSportsNY.com, is focused," XLMedia chief executive Stuart Simms said in a statement.
"In order to build upon the positive momentum of CBWG, it is important to retain the team, especially the founders, Kyle Scott and Jason Ziernicki; it is great to be able to depend upon their sports expertise and knowledge. They are also exceptionally keen to play a central role in the next exciting stage of the journey, both for this business and for our broader US operations," he added.