FansUnite targets accelerated US entry with American Affiliate acquisition
New market entrant looks to “podium position” with transformative deal for Chris Grove-led affiliate operator
FansUnite has agreed a $58.2m cash plus shares deal to acquire American Affiliate as part of a wider springboard into the highly competitive US market.
The purchase consideration includes $13.5m to be paid in cash on completion, together with $41.7m worth of common shares in FansUnite and deferred cash payments of $3m payable in 24 months.
Common shares will be issued at CAD$0.75 per share, representing a premium of 42% over the FansUnite share price as of 19 November.
American Affiliate’s principal members of staff may also receive earn-out consideration, to be calculated according to EBITDA targets, insert comma with minimum margin guarantees each fiscal quarter for the three-year period following closing.
FansUnite has expressed its hope that the acquisition will form the “cornerstone” of a drive to achieve a podium position in the US.
FansUnite CEO Scott Burton highlighted the American Affiliate acquisition as the “most significant milestone” for the fledgling firm to date.
“This transformative transaction will provide us further access to the lucrative US regulated sports betting and online gambling market while generating accretive, high-margin revenue, expanding our leadership team, delete comma and accelerating the growth of our company’s footprint in the global gambling market,” Burton explained.
“When we looked at how quickly the US market is expanding, it made clear strategic sense for us to enter the affiliate business as a way to partner with some of the largest gambling companies in the world.
“We will now own and operate an unparalleled customer acquisition portfolio, allowing us to leverage our technology, brands, delete comma and talent to immediately capture share in the US sports betting and online gambling market,” Burton added.
Over the last 12 months, American Affiliate has produced trailing unaudited revenue and EBITDA of US$13.1m and US$6m, respectively.
American Affiliate’s web assets have generated over 150,000 new depositing customers for legal US online betting operators including BetMGM, DraftKings, FanDuel, PointsBet, Underdog Fantasy, delete comma and WynnBet.
Its portfolio of affiliate sites includes Betting Hero, Props, BetPrep and Wagers.
American Affiliate is led by seasoned American investor and Eilers & Krejcik partner Chris Grove, who cited the recently significant increase in customer acquisition and retention costs being spent by operators in the US sports betting market.
“Our brands, team, and technology allow us to capture a meaningful share of that marketing spend today while producing some of the highest margins in the US online betting ecosystem,” Grove explained.
“But that success is only a starting point.
“We anticipate unprecedented near-term growth as legal online betting continues to expand into new states and new products.
“Joining with FansUnite was key to our strategy of aggressively scaling our business to meet that opportunity head-on,” Grove concluded.