XLMedia expands presence in the US market with the acquisition of CBWG Sports in a landmark $12 million cash and $3.5 million shares deal.
CBWG US Portfolio Accepts XLMedia’s Acquisition Bid
XLMedia has announced a big industry move with the acquisition of CBWG Sports, a firm that owns sports gaming and betting businesses and assets, in a bid to secure a larger share of the US market and bolster XLMedia’s presence in North America.
Based on the agreement, XLMedia will pay $12 million in cash and issue 7,954,546 new shares for the sum total of $3.5 million, with a future contingent consideration of up to $9.5 million, depending on market performance and revenue numbers, payable through the end of 2023 at the latest.
The announcement has had an immediate impact on XLMedia’s shares which jumped 10% on the news and are likely to experience a period of buoyance as the company acquires strategic assimilates, such as PASportsBooks.com, BetNewJersey.com, and ActionRush.com.
CBWG presently has affiliates in six states, with New Jersey and Pennsylvania constituting the bulk of its focus.
The company was established earlier in 2020 through a merger between CB Sports and Warwick Gaming, leading to a new brand identity for both companies with a particular focus on professional and college sports markets in the United States.
CBWG comes with a marketing agency division that will allow XLMedia to bolster consumer conversion and retention in regulated jurisdictions across the United States, including Colorado, Illinois, and Tennessee.
XLMedia Pins Hopes on Strong Market Metrics
According to XLMedia, CBWG’s portfolio accounts for 550,000 monthly site visits, resulting in yearly $4.6 million in revenue and $2.7 million in EBITDA, making for a strong entry in the market and good growth potential.
XLMedia CEO Stuart Simms has committed to retaining the existing CBWG team as well as to keep founders Kyle Scott and Jason Ziernicki onboard. Commenting on the partnership, Simms confirmed that XLMedia was exciting to what can only be described as attractive set of assets, the executive said.
XLMedia is not the only company preparing for a strong growth in the US sports betting market, with an estimated 60% of the US population having access to regulated sports betting markets by the end of 2022, and many sports betting markets in the pipeline.
Earlier this year, the November ballot saw six states give their preliminary approval for the re-regulation of their own gambling industries to allow sports betting.