Affiliate and media firm Gambling.com Group Ltd has entered into a definitive agreement to acquire fantasy sports news and advice provider Roto Sports Inc, the operator of RotoWire.com, for the aggregate purchase price of $27.5m.
The cash and share transaction is expected to close in early January 2022 and is subject to customary closing conditions.
According to Gambling.com, the acquisition will “immediately expand” its US presence and is expected to create immediate accretion to fiscal 2022 earnings. The group said it will leverage RotoWire’s existing audience, content library, workforce, media partnerships and trust with US sports fans to further accelerate its growth in the US online sports betting space.
It added that RotoWire’s digital assets – when combined with the group’s digital expertise and technology platform – will drive substantial, incremental affiliate revenue in the rapidly expanding sports betting environment.
CEO Charles Gillespie explained: “Over the past 25 years, Peter and the RotoWire team have produced some of the best fantasy sports content in America and have, in turn. embedded their business into the heart of the American sports experience.
“Commercially, the RotoWire business has three different revenue streams, each generating over $1m per year, which give it significant reach into sports media organizations as well as with advertisers and individual sports fans. These deep and long-lasting customer relationships are an ideal platform from which to capitalize on the new era of American sports – the betting and gaming era.”
Peter Schoenke, President of RotoWire and past-Chairman of the Fantasy Sports & Gaming Association, added: “The United States is entering a whole new world of sports fandom and combining forces with Gambling.com Group will accelerate RotoWire’s growth. Gambling.com Group’s resources and experience will help RotoWire rapidly advance its sports betting offerings to take full advantage of this new era.”
Of the aggregate purchase price of $27.5m, $7.5m is deferred over a two-year period following closing. The aggregate purchase price is expected to be approximately four times Roto Sports’ estimated 2021 revenue.
The group will pay $20m at closing, consisting of $15m in cash and $5m in newly issued, unregistered ordinary shares, valued on a volume weighted average price over the preceding 10 trading days.
A further $2.5m and $5m will be payable on the first and second anniversaries of the closing, respectively, neither of which are dependent on the financial performance of RotoWire. The group has the ability to elect to pay up to 50% of each of the deferred amounts in unregistered ordinary shares.
“We will commence work on expanding sports betting content and tools across RotoWire’s digital assets straight after closing,” said Gillespie. “We believe that the combination of these two complementary businesses creates immediate accretion to our fiscal 2022 earnings and establishes a foundation for a leadership position in US sports betting which will drive near-term, and especially long-term, value creation for our shareholders.”
