Catena Media have continued their efforts to expand in the sports betting sector with the recent acquisition of the German company Baybets. The deal is thought to be worth €26.5m initially and is another signal of intent from the Maltese-based company. Of the €26.5m up front fee, €13.25m will be paid via freshly issued shares in Catena itself, with the remainder paid in cash.
Baybets is an affiliate site that specialises in comparing sports betting information for the German speaking market. By making this move, it would seem that Catena Media are looking to break into the lucrative German market. With 2018 set to be a huge year for sport with the World Cup, this is a well timed move by Catena.
As part of the takeover deal, 50 websites that were part of the Baybets catalogue such as sportwetten.org will move into Catena Media control. It is also believed that 23 Baybets employees will also move to the main Catena Media office in Malta as part of the completed negotiations.
It is not only the upfront €26.5m fee that Catena have paid to acquire Baybets. The deal has been structured to include earn-out payments also, which will make the total cost of acquisition in the region of €57m. These payments are dependent on how the newly acquired asset performs over a period of 24 months from the acquisition date.
If applicable, the first earn-out payment will happen 45 working days after 30th November 2018 and is worth up to €20m. The second earn-out payment is a maximum of €43.50m and will happen 45 working days after the 30th November 2019. It is understood that lock up periods will apply if any of this money is paid in shares.
Catena Media is already a big player in the market, but this deal to move into Germany only strengthens this position. The integration of Baybets into the Catena Media family is well underway now the deal has gone through and makes Catena a huge figure in the sports affiliate betting sector.
With an estimated quarterly sales figure of €2.25m and an expected operating margin of around 70%, this is a lucrative deal. Acting Catena CEO Henrik Persson Ekdahl has been quoted as saying: "We are proud to announce the largest acquisition made by Catena Media since company inception, making us one of the strongest sports betting affiliate players on the market. We have set ambitious financial targets for the company, and the acquisition is fully in line with those targets."