Gambling.com acquires BonusFinder for up to $69M eying Ontario's iGaming launch

Provider of player acquisition services for the regulated global online gambling industry, Gambling.com Group Limited, announced Tuesday it has acquired NDC Media, publisher of BonusFinder.com, and related assets: a high-growth, high-margin performance marketing business focused primarily on the online gambling industry in North America, with Canada as its largest market.

The acquisition of BonusFinder supports Gambling.com Group's growth and expansion strategy in North America, and is expected to be immediately accretive. The transaction closed on January 31, 2022, and will be consolidated into the Group Financial Statements from February 1, 2022.

BonusFinder publishes online portals which help consumers find and compare bonuses for online sportsbooks and casinos, the same fundamental business model as Gambling.com Group.

Canada is currently BonusFinder's largest market, strategically positioning the Group for the expected expansion of the regulated online gambling market, beginning with the province of Ontario, which is set to launch iGaming operations on April 4. BonusFinder also has traction in the United States, where the Group expects to be able to accelerate their growth in the coming years.

Under the terms of the purchase agreement, Gambling.com Group paid an aggregate purchase price of €12.5 million ($13.92 million), of which €10 million ($11.14 million) was paid in cash (subject to adjustments for cash, working capital, and indebtedness, among other factors), and €2.5 million ($2.86 million) in newly issued, unregistered ordinary shares. The cash portion was funded with available cash on hand.

The selling shareholders may benefit from additional earnout payments based on financial performance in each of 2022 and 2023. According to the Group's forecast, the total consideration, including purchase price paid at close and both earnout payments, is expected to be approximately €41 million ($47 million). This total consideration implies a multiple of under 3.5 times expected 2023 revenue.

The maximum total consideration is up to €60 million ($69 million), consisting of €12.5 million ($13.92 million)  already paid at close and an earnout payment of up to €19 million ($21.85 million) payable in 2023 as well as an additional earnout payment of up to €28.5 million ($32.8 million) payable in 2024. Gambling.com Group has the option to pay up to 50% of each of the earnout payments in unregistered ordinary shares at its sole discretion.

In an official press release, Charles Gillespie, Chief Executive Officer of Gambling.com Group, spoke about this new milestone and said: "Over the past five years, Fintan Costello and his team have developed a professional, industry-leading, performance marketing business with a customer-centric and brand-driven approach. The acquisition of BonusFinder gives Gambling.com Group additional scale in the North American online gambling market. BonusFinder's strong presence in Canada is expected to drive increased market share for the Group ahead of the anticipated Ontario online sports betting and iGaming market launch in April."

"We believe that the combination of these two complementary businesses is immediately accretive to our fiscal 2022 earnings and establishes a foundation for a leadership position in North America which will drive value creation for our shareholders," he continued.  "We believe the deal structure provides an attractive risk/reward balance for the Group. The total consideration for the transaction will vary commensurately with the financial performance of the acquired business, guaranteeing an attractive acquisition multiple for the Group and tightly aligning the financial incentives of the newly combined businesses."

Fintan Costello, Chairman of BonusFinder, added: "These organizations complement each other well as partners within the North American market. Gambling.com Group has demonstrated its leadership position within the online sports betting and iGaming industry, and its proprietary technologies and experience will provide BonusFinder with the tools to maximize growth in this exciting new era of North American regulation."