GIG Takes Leading Position With Nordics Acquisition
Gaming Innovation Group Inc. (GIG) has through its subsidiary Innovation Labs agreed to acquire all assets in one of the biggest affiliate networks in Scandinavia, Stk Marketing Ltd, for a total consideration of NOK 240 million (around EUR 26 million). This is GIG´s fourth affiliate acquisition in 2017 and the Company has now established itself as a Nordic market leader in the affiliate segment.
GIG expects the acquired assets to generate above EUR 7 million in EBITDA during the first 12 months after completion of the transaction. Around 70 percent of this EBITDA is expected to be generated from perpetual revenue share agreements. The network will be integrated into Innovation Labs’ BI/Data proprietary systems & marketing platforms, providing both technological and operational synergies which will improve the margins.
Including the Stk Marketing acquisition, the four affiliate transactions made so far in 2017 are in combination expected to contribute with an annual EBITDA close to EUR 13 million over the first 12 months after the respective closings.
“We have set an ambition for Innovation Labs to become the largest lead generation business in iGaming and we are well underway in realizing this. Furthermore, we have now established a leading position in the Nordic affiliate market. In line with previous acquisitions and GIG´s vision, the Stk acquisition will enable Innovation Labs to refer more customers to our B2B partners and thus benefit all parties engaged in the expanding GIG iGaming eco-system”, says Robin Reed, CEO of GIG.
The acquisition will be settled primarily with proceeds from the bond issue GIG made in February 2017. The first half of the settlement is due at closing and the reminder in December 2017. The transaction is subject to a satisfactory due diligence and final board approval. Closing is expected in August 2017.
GIG’s subsidiary Innovation Labs is a fast-growing online marketing company for iGaming. It refers paying users to B2B clients primarily on perpetual revenue share agreements. It sources these paying users by obtaining competitive rankings for high-value keywords in search engines through SEO (search engine optimization), generating traffic to owned websites. These websites have guides and quality content for the gaming industry and serves as paths to operators. Innovation Labs also refer paying users through data driven media buying techniques.