Better Collective dampens M&A expectations due to “mismatch” over valuations
CFO Flemming Pedersen says firm remains on the hunt for targets but is reluctant to be stung by sky-high prices
Better Collective CFO Flemming Pedersen has poured cold water on any major M&A deals in the near future for the affiliate giant.
Speaking on the analyst call following the firm’s Q4 2022 results, Pedersen was questioned whether the macroeconomic environment would see a stalling in the group’s M&A pipeline.
Pedersen revealed that the macroeconomic environment and soaring interest rates were not the core reason for a lack of upcoming M&A, but valuations.
The CFO said: “We remain very active and focused [on M&A]. Many of the companies we are looking at are privately held companies, they are profitable and cash flow-generating and right now there is a mismatch between public valuations and private price expectations.
“Until that gets into sync again, I think there will be more muted activity. It is not the interest rates as such, it is more the public valuations,” he added.
Pedersen’s comments come despite the Danish giant revealing it had acquired a “smaller asset deal for a sports media in an emerging market” for $4.3m, with $3m paid upfront post Q4.
Better Collective did not disclose the name of the asset but did confirm it had attained an 8.5% stake in rival Catena Media.
Pedersen would not be drawn on what Better Collective’s plan or ambitions are for the Catena Media stake.
Strong Q4 results including a 64% surge in revenue and a 115% leap in EBITDA left the firm with capital reserves of €76m, of which €31m was in cash and €44m in unused bank credit facilities.
Better Collective is no stranger to M&A having penned a €105m deal for Futbin in April 2022 and a €21.4m agreement for Canada Sports Betting in March of the same year.
In 2021, the firm parted with €33m to fully acquire RotoGrinders while it paid a record $240m for Action Network as it picked up its flagship US asset.