Browse articles by topic

Better Collective boosts US presence with RotoGrinders deal


Stockholm-listed Better Collective will significantly expand its presence in the US market through the acquisition of daily fantasy and sports betting affiliate Rical LLC, operator of the RotoGrinders and SportsHandle portals.

Founded in 2009, and headquartered in Nashville, Tennessee, RotoGrinders operates a network of sites including PennBets, USBets and poker site It generated revenue of more than $8m (£6.3m/€7.2m) in 2018, and earnings of over $3m.

While the business was originally focused on the daily fantasy market, it has expanded into sports betting and online gambling.

“Since PASPA was repealed by the US Supreme Court last year, we have carefully evaluated how best to establish Better Collective in the growing US market,” Better Collective chief executive Jesper Søgaard explained.

“We have assessed various acquisition opportunities, searching for access to strong products and dedicated people with insight into this market,” he continued. “We strongly believe that we found exactly that in RotoGrinders, where we see a strong and dedicated management team and talented employees.”

Better Collective will pay $21m for an initial 60% stake in the business, comprising $17.85m in cash and $3.15m in shares.There is an agreement in place to acquire the remaining 40% of shares between 2022 and 2024. 

The valuation of this stake, held by the company’s three founders, will be based on an EBITDA multiple of between 5x and 10x, determined by the profitability RotoGrinders, with additional conditions relating to the performance of Better Collective’s wider US business.

By having RotoGrinders’ management and key employees remain shareholders in the business, Søgaard said they would share the potential risks and upside over the coming years.

Once Better Collective completes the acquisition of its initial 60% stake, RotoGrinders will be consolidated into its accounts as of June 1, 2019. It will remain headquartered in Tennessee, with the Better Collective USA subsidiary’s sales and marketing activities to be coordinated from the affiliate’s New York office, overseen by vice president of business development and sales Marc Pedersen.

Through the deal, Better Collective expects revenue from the US to surpass $10m in 2019.

“Joining the Better Collective group will help us fully realize the potential we’ve created with the RotoGrinders network,” RotoGrinders CEO and co-founder Calvin Spears said. “Regulated online sports betting will create an enormous affiliate marketing opportunity in the US.

“We feel Better Collective is the perfect partner for us as this opportunity unfolds,” Spears said. “The experience, resources, and technology they’ve built up over the past 15 years in European sports betting will prove incredibly valuable here.

“Our combined goal is to be the largest US sports betting affiliate and we’re in a great position to make it happen.”