OSLO, NORWAY: Gaming Innovation Group Inc. (GiG) has today signed an agreement to acquire affiliate leader KaFe Rocks Ltd. Through this strategic purchase, GiG Media will cement its position as the dominant lead generator within the lucrative online casino market.
Furthermore, GiG Media will accelerate its market presence in the valuable North American market. The strong synergies underlying the transaction will further accelerate the growth GiG Media has delivered over the last few years, with 12 successive record-breaking revenue quarters.
KaFe Rocks is a prominent iGaming affiliate, boasting multiple Power Affiliate top 10 rankings. The company has a thriving global portfolio diversified across 15+ markets, featuring user-centric US-facing flagship brands Time2play.com and USCasinos.com. These assets will further position GiG Media in the US market.
Over the last 12 months, Time2Play has shown impressive revenue growth, with further acceleration expected.
Like the successful AskGamblers acquisition, GiG Media aims to drive substantial growth for the acquired KaFe Rocks assets, leveraging its proprietary media- and marketing technology and a strong focus on data and business intelligence.
Solid cost synergies underlying the deal will further maximise profitability for the acquired business.
It is anticipated that Kafe Rocks will generate a minimum revenue of MEUR 23 in 2024 with an EBITDA margin above 45%, implying a 2024 EV/EBITDA multiple of around 3.6x for the acquisition.
The EBITDA margin is expected to increase over the next few years. On top of the revenue and EBITDA growth potential, the acquisition will further diversify GiG Media’s business, improving customer, website, and market concentration and reducing overall risk.
The investment will accelerate GiG Media revenues, expected to reach between MEUR 125-135 for 2024.
Jonas Warrer, CEO of GiG, said: “We want to remain the leading casino affiliate in the industry and grow in the North American market. Our acquisition of KaFe Rocks validates these goals. After the successful integration of AskGamblers, we have been looking for the next splendid candidate to join the family.
In KaFe Rocks, we’ve found a flourishing business led by an exceptionally skilled team. Their reputable affiliate assets will undoubtedly drive growth for the broader group. I eagerly await working closely with the KaFe Rocks team.”
Aimee Speight, spokesperson for KaFe Rocks, said: “It’s a momentous occasion for KaFe Rocks to join forces with GiG Media. We considered several buyers but were persuaded to go with GiG Media based on the strong performance the company has shown over the last few years. Joining GiG Media, we are optimistic about seeing Kafe Rocks business venturing into new heights.”
The purchase price is EUR 35 million, consisting of a EUR 15 million upfront cash payment and EUR 20 million in four semi-annual payments over 24 months with an added earn-out given specific performance targets are met. In addition, GiG will pay EUR 2.5 million in shares subject to specific operational cost savings targets.
The transaction is structured by way of a Share Purchase Agreement (SPA) were GiG’s subsidiary Innovation Labs Ltd. (part of GiG Media) acquires KaFe Rocks Limited (Malta). GiG intends to finance the initial consideration through a combination of existing cash, shareholder loans, and/or proceeds from a
potential bond issue.
Closing of the transaction is subject to completion of due diligence, financing, applicable regulatory approvals, and final board approval and is expected in December 2023.