XLMedia expands US network with acquisition of CBWG
XLMedia has announced a significant step forward in its stated priority to expand its presence in the burgeoning US Sports market, through the acquisition of the sports gaming and sports betting business of CBWG Sports.
CBWG, which was formed early in 2020 through a combination of CB Sports and Warwick Gaming, is a highly successful and fast-growing digital media publishing group, based in the northeast United States, focused on professional and college sports, sports gaming and sports betting. CBWG is registered as a sports gaming affiliate in six states, including New Jersey and Pennsylvania.
The business owns and operates the sports and gaming assets CrossingBroad.com, PASportsBooks.com, BetNewJersey.com, EliteSportsNY.com, PromoCodeKings.com and ActionRush.com and already has agreements in place with leading regulated online sportsbooks in the United States.
The business also has an agency arm, which partners with leading sports media brands to drive user acquisition in the regulated betting markets of Colorado, Illinois, and Tennessee. Through the due diligence process, management have estimated the owned sites receive around 550,000 visits per month, and generated unaudited Revenue and EBITDA, before founders’ compensation, over the trailing 12 months, ending October 2020, of approximately $4.6 million and approximately $2.7 million respectively.
Under the terms of the definitive documents for the acquisition, XLMedia will pay upfront consideration of USD$12 million in cash and issue 7,954,546 new XLMedia plc shares (representing an aggregate value of USD$3.5 million), as well as potential future contingent consideration of up to an additional USD$9.5 million, based on net revenue performance of the acquired business, payable over three years to the end of 2023.
Stuart Simms, CEO of XLMedia commented:”It is great to have acquired such an attractive set of assets during an inflection point for the US Sports betting market. On some estimates, almost 60% of the US population is set to have legal access to Sports betting by the end of 2022 – this could include New York, where one of the key assets, EliteSportsNY.com, is focused.”
“In order to build upon the positive momentum of CBWG, it is important to retain the team, especially the founders, Kyle Scott and Jason Ziernicki; it is great to be able to depend upon their sports expertise and knowledge. They are also exceptionally keen to play a central role in the next exciting stage of the journey, both for this business and for our broader US operations.”