Acroud AB, a global provider of Software as a Service (SaaS) solutions to the affiliation industry, announced the acquisition of a 60% share in an Affiliation and Media Company for a total consideration of £5.1 million ($5.8 million).
Expanding into Sports Betting
The acquisition comprises affiliation assets and online gaming technology and is expected to have a positive effect on Acroud’s annual revenue and EBITDA of over €9 million ($8.8 million) and €4 million ($3.9 million), respectively.
“This acquisition is another piece of our puzzle to establish Acroud as a diverse player in the Advertisement and Affiliation space based on intelligent solutions,” said Robert Andersson, chief executive officer and president of Acroud AB, outlining that the newly acquired assets and technology would “blend very well into” the company’s current product portfolio and set the business on a new path to growth.
The total price consideration will comprise £1 million ($1.13 million) in shares and £4.1 million ($4.6 million) in cash that will be paid over 18 months. Acroud said it would finance the transaction via existing cash and future operational cash inflow.
The transaction is not pending any additional conditions and is completed as of October 13, 2022. Acroud paid £2 million ($2.26 million) in cash and £1 million ($1.13 million) in shares at closing and will pay the remaining £2.1 million ($2.37 million) in cash over the next 18 months.
Calculating the Share Consideration
The share consideration of the transaction was based on the Volume Weighted Average Price on Nasdaq First North Growth Market for the 20 consecutive trading days preceding the announcement, converted into GBP using the exchange rate as determined by Riksbanken on the date 5 business days prior to the date on which consideration shares are issued. Shares are to be issued within 20 days of the closing and will be subjected to a two-year lock period effective from the date of closing.
A call option for the remaining 40% of the shares based on the financial performance of an EBITDA multiple of 5.5x for the 12 months ending September 30, 2028, will be available to Acroud in 2028, and if exercised, the acquisition of the outstanding shares will be 40% settled in existing cash and 60% in own shares.
The acquisition is in line with Acroud’s expansion strategy, adding recurring sportsbook revenue and guaranteeing new depositing customers to more than double the company’s existing ones, and it fits within the idea of creating a low-volatility stable-profitability business.