XLMedia Plc has entered a ‘conditional agreement’ to sell its North American Business to Sportradar AG for a $30m cash consideration.
This morning, XLMedia notified investors that Sportradar had tabled a $20m cash offer combined with a $10m performance incentive (payable in April 2025) to acquire the firm’s remaining North American media assets.
The offer remains subject to approval by shareholders at the General Meeting to be held on 7 November 2024. Prior to the deal, Sportradar received commitments from shareholders representing 31% of the ordinary share capital in favour of the sale.
Upon completing the deal, XLMedia will wind down its business by registering as an AIM Rule 15 Cash Shell company with no trading operations.
Founded in 2008, XLMedia is widely regarded as the first company to implement a pioneering network model to scale and grow its presence within the iGaming and sports betting media markets.
XLMedia’s North American revenues for 2023 stood at $27.5m, with an adjusted EBITDA contribution of $5.5m – as dealmakers determined the value of XLMedia’s assets at 5.5x EBITDA.
The sale sees XLMedia fulfil a strategic objective to reward investors, as the current share price does not reflect the value of the business.
This year’s trading has seen XLMedia secure cash proceeds of $72.5m in asset sales, including its previous sale of European and Canadian media assets to Gambling.com Group for $42m (deal completed in March 2024).
Marcus Rich, Chairman of XLMedia, commented: “In our ongoing commitment to maximise shareholder value, following the Europe Disposal, the Board is pleased to have reached an agreement to sell the North American Business to Sportradar, pending shareholder approval. We anticipate an initial distribution from the net proceeds to shareholders before the year’s end.”
The decision to sell its remaining North American units was undertaken as XLMedia’s “current scale on a standalone basis could impact its ability to compete in the evolving US market. In addition, the Board is also mindful that following the Europe Disposal, the continuing business of the North America Business may be considered too small to remain listed.”
Despite overhauling its US media strategy and partnerships, XLMedia’s “growth of its US revenue streams did not match the Group’s original plans.”
In 2020, XLMedia initiated its first US M&A deal with the acquisition of CBWG Sports. The following year, it further expanded by acquiring two more assets: Sports Betting Dime in March 2021 and Saturday Football Inc in September 2021.
Due to the need to finance its past North American acquisitions at high market value using cash generated from trading, XLMedia explained that it has been constrained in its US activities.
The transaction concluded: “The Board considers that Sportradar’s offer represents a fair net present value for the standalone North America Business’s future revenue and profitability.”
2024, sees Sportradar trades with confidence, aiming to achieve its NASDAQ IPO target of surpassing the €1bn revenue mark and becoming the most highly valued company in sports technology and betting data.”
Sportradar’s strategic initiatives have led to the integration and enhancement of its sports data and intelligence solutions, enabling the company to offer new marketing services to iGaming and sports betting clients across media, affiliate marketing, and paid search channels.