- TopBetta acquires database of 15,000+ as part of Mad Bookie acquisition
- Mad Bookie has been established for 2 years with annualised turnover of ~$80M
- Completion remains subject to regulatory approval by NTRC and Racing Bodies
TopBetta has entered into a binding, conditional agreement ("Agreement") to acquire the assets of online Australian corporate bookmaker, Mad Bookie ("Acquisition"), including its customer database, clients and IP (together "Mad Bookie Business"). Completion of the Acquisition is conditional on TopBetta receiving approval from each of Northern Territory Racing Commission ("NTRC"), Racing Victoria and Racing NSW in respect of the Acquisition and there being no material adverse change in the financial condition of the Mad Bookie Business.
After completion and for the immediate term, the Mad Bookie Business will continue to operate under its established brand but under TopBetta's existing licence held with NTRC. The Company plans to align the synergies across the business' while maintaining the unique brands of both TopBetta and Mad Bookie.
Mad Bookie has grown quickly over the past 2 years with unaudited annualised turnover of ~$80M from an acquired database of punters in excess of 15,000.
The Company's CEO, Todd Buckingham, said: "The acquisition of Mad Bookie has the potential to quickly and substantially increase turnover for TopBetta's retail business while adding significant revenues due to higher yields and cost savings through aligning the synergies between the businesses.
"The deal will also defer payment of the purchase price until after the first 12 months, which will allow the TopBetta business to maintain cash flows over the initial period.
"To acquire a ready-made, active database like Mad Bookie's under this arrangement makes a lot of sense in an industry that has high customer acquisition costs, and we will certainly be on the lookout for similar deals should they arise in the future, both here in Australia and Internationally."
Mad Bookie founder and CEO, Brett Luntz, and key staff will remain with the Mad Bookie Business for at least the Earn Out Period, with Mr Luntz agreeing to provide consulting services to the Company at market rates throughout this period.
Brett Luntz said "We are delighted to be joining the TopBetta group. We believe that the baseline we have set up for our loyal customer base over the past 24 months will be further enhanced through this acquisition and the synergies it delivers. We couldn't be more excited."
The key terms of the Agreement include:
- upon Completion, TopBetta will pay an initial instalment of $100,000 in cash ("Initial Instalment") to Mad Bookie;
- the purchase price for the Mad Bookie Business is to be calculated as the greater of ("Purchase Price"):
o 24 times the average monthly net gaming revenue (less taxes and product fees) over the 12 months after completion of the Acquisition ("Earn Out Period") less the Initial Instalment and specified expenses incurred by Topbetta in relation to the Mad Bookie Business over the Earn Out Period ("Specified Expenses"); and
o $400,000 less Specified Expenses;
- TopBetta is to pay the Purchase Price at end of the Earn Out Period in either cash, shares in the Company (valued at a 10% discount to the 15 day VWAP) or a combination of both, to be agreed between the parties when the Purchase Price is agreed;
- If TopBetta elects not to pay the Purchase Price in full in cash, and Mad Bookie do not accept shares as payment of the Purchase Price (or part thereof), Mad Bookie may elect to purchase the Mad Bookie Business from TopBetta in consideration for a payment equal to the level of funds invested by TopBetta (specifically the Instalment and Specified Expenses), in full satisfaction of TopBetta's obligations regarding the Purchase Price.
About Topbetta Holdings Ltd
TopBetta Holdings Limited (ASX:TBH) is an ASX-listed holding company and a global provider of online wagering products and services to both wholesale and retail markets through its various wholly owned subsidiaries. TopBetta Pty Ltd operates a retail wagering business, offering consumers wagering, fantasy tournament and content products and services. Global Tote Australia Pty Ltd conducts TBH's Wholesale Business, which includes operating and licensing its wholesale tote product which enables licensed wagering operators, including corporate bookmakers and tote operators from all over the world, to participate in global pools. The Wholesale Business is conducted under a B2B licence granted by the UK Gambling Commission to Global Tote Limited, a company incorporated in Alderney, UK.
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