Australian lottery retailer Jumbo Interactive Limited made an official press release confirming the successful acquisition of StarVale Group, a UK-based external lottery management, and online payment company. The £23.0million deal concluded without any issues and signals the next step in Jumbo’s global growth strategy.

The Purchase Completed in Just Over Ten Months

The first official announcement of the acquisition dates to January 2022. The Australian digital lottery company announced that it would facilitate the deal using its newly incorporated business entity Jumbo Interactive UK, which would acquire 100% of StarVale’s business. The UK Gambling Commission issued its formal approval on 12 October, allowing the smooth conclusion of the acquisition process after the parties ensured that they met all the terms of the Sale and Purchase Agreement.

Jumbo paid 63% of the £23.0million acquisition using its cash reserves, financing the remaining amount via existing debt facilities. The deal also includes a deferred consideration of up to £4.5million that will be paid out if the company successfully reaches several predefined earnings targets by 30 June 2023.

StarVale Joins Jumbo’s Managed Services Arm

Thanks to the StarVale acquisition, Jumbo will be able to reach more than 850,000 UK lottery players, introducing them to its Powered By Jumbo platform and substantially expanding the company’s global reach.

More importantly, Jumbo gains access to StarVale’s digital payment solution DDPay, providing excellent integration opportunities with lottery operator Gatherwell, which it acquired in 2019. Together with Canadian lottery management provider Stride, the companies form Jumbo’s growing Managed Services business segment. 

However, successfully integrating the new businesses may not be an easy task. In 2021, StarVale generated £2.1 million in Net Profit Before Tax. It is a good start, but Jumbo will likely perform substantial optimizations to boost that number and fully utilize the new assets.

Jumbo Continues To Enjoy Strong Momentum

2022 has been pivotal for Jumbo as the company used its strong financial foundation to underpin its plans for global expansion. The several rapid acquisitions signal the lottery retailer’s confidence in its scaling Managed Services and Software as a Service segments.

According to the official press release, the StarVale acquisition still left Jumbo Group in a net cash position, which is a favorable sign for continued expansion. With three high-profile purchases successfully concluded, the company is heading into 2023 with substantial momentum. Next year’s financial results should offer valuable insight into how effectively Jumbo has handled its Managed Services sector and consolidated its position in the UK lottery space.