XLMedia Sheds European and Canadian Assets, Pivots Towards U.S. Market

In a strategic move, affiliate powerhouse XLMedia has struck a deal to divest its European and Canadian sports betting and gaming assets to Gambling.com Group (GAMB), signalling a concerted shift towards the lucrative U.S. market.

The transaction, valued at up to $42.5 million, is poised to fortify XLMedia's focus on its burgeoning North American endeavors.

Proceeds from the sale will be allocated to defraying expenses linked to the company's U.S. operations, encompassing asset transition expenses and resolving outstanding tax provisions.

Assets included in the deal comprise prominent platforms such as Freebets.com, WhichBingo.co.uk, Nettikasinot.com, and Vedonlyonti.com, alongside a roster of smaller European and Canadian sites.

Marcus Rich, Chair of XLMedia, hailed the sale as a boon for shareholders, emphasizing its potential to facilitate legacy liabilities, enhance working capital, and deliver returns to investors.

The agreement entails a fixed consideration of $37.5 million, augmented by an earnout component of up to an additional $5 million.

Payments from GAMB to XLMedia will be staggered across three installments, commencing on April 1, with subsequent disbursements scheduled six months and one year after closing.

GAMB anticipates substantial revenue growth following the acquisition, forecasting approximately $10 million in revenue and incremental Adjusted EBITDA of around $5.0 million in the last nine months of 2024.

Charles Gillespie, CEO and Co-Founder of GAMB, lauded the acquisition as a strategic coup, augmenting the company's brand portfolio and bolstering growth prospects in key markets.

By integrating these assets into its technology ecosystem, GAMB aims to unlock their full potential and drive sustained shareholder value.

XLMedia's foray into the North American market commenced in 2020, with ambitions to establish a robust sports-led business presence.

However, challenges in the region have necessitated a recalibration of its strategy.

Hindered by dwindling customer acquisition and revenue shortfall in 2023, the company has refocused its efforts on the burgeoning U.S. regulated landscape.

The divestiture mirrors a broader trend in the affiliate sector, with operators like Catena Media relinquishing European and Australian assets to double down on North American expansion amidst a wave of organizational restructuring.

With XLMedia's sights set on capitalizing on the burgeoning U.S. sports betting market, the divestiture underscores a strategic pivot towards unlocking value in high-growth territories.