With the acquisition of BonusSeeker.com, Catena Media plc has continued the trend in the affiliate market of mergers and acquisitions, as well as further strengthening its position as a leading iGaming affiliate in the regulated New Jersey market.
BonusSeeker, which is on a strong growth trajectory, provides its users with unbiased comprehensive reviews of all the legal casino operators in New Jersey. The acquired assets currently generate sales of about $450.000 per quarter with an operating margin of approximately 70%.
Henrik Persson Ekdahl, Acting CEO of Catena Media commented: “Through the acquisition of these assets we confirm our position as the number one player in igaming lead generation in the US. This is completely in line with our growth strategy and is a big step in furthering our lead to our European and American competitors. Furthermore it is a strong signal to the industry that we are picking up pace in the US market.”
The initial purchase price, payable in conjunction with the transfer of the assets, amounts to an upfront payment of $6.5 m of which $1.0 m will be paid with newly issued shares at prevailing market rate in Catena Media and the remainder in cash. In addition, there is an earn-out of maximum $9.5 million which is based on revenue performance over a period of two years.
The shares will be issued at a subscription price of SEK 128,21 per share, corresponding to the volume-weighted average price for Catena Media’s shares on Nasdaq Stockholm during a period of 30 trading days up to and including March 27, 2018. This means that a total of 63 904 shares will be issued, corresponding to approximately 0.1 percent of the shares and votes in the company. Seventy-five percent (75%) of the shares will be subject to a lock-up period of 12 months as from the closing date of the transaction. The rest of the twenty-five percent (25%) will not be under any lock-up restrictions.
In a reasonably expected scenario, the total cost of the acquisition would be approximately $11 million, i.e the upfront payment of $6.5 million and earn-out payments in the total amount of $5.5 million. In this scenario the acquired assets need to generate revenue growth of between 80 and 140 percent during the earn-out period.
