Affiliate marketing services provider XLMedia has completed the acquisition of sports gaming and sports betting business CBWG Sports.
XLMedia will pay an initial $12.0m (£9.0m/€9.9m) in cash and issue 7,954,546 new shares – at an aggregate value of $3.5m – to take ownership of CBWG.
The deal also includes a potential future contingent consideration of up to $9.5m, based on net revenue performance of the acquired business, payable over three years to the end of 2023.
Founded earlier this year through the combination of CB Sports and Warwick Gaming, CBWG is a digital media publishing group focused on professional and college sports, sports gaming and sports betting.
CBWG is registered as a sports gaming affiliate in six states, including New Jersey and Pennsylvania, and owns and operates sports and gaming assets including CrossingBroad.com, PASportsBooks.com, BetNewJersey.com, EliteSportsNY.com, PromoCodeKings.com and ActionRush.com.
The business also has an agency arm, which partners with major sports media brands to drive user acquisition in the regulated betting markets of Colorado, Illinois, and Tennessee.
CBWG founders Kyle Scott and Jason Ziernicki will remain part of the team after the acquisition.
“It is great to have acquired such an attractive set of assets during an inflection point for the US sports betting market,” XLMedia chief executive Stuart Simms said.
“On some estimates, almost 60% of the US population is set to have legal access to Sports betting by the end of 2022 – this could include New York, where one of the key assets, EliteSportsNY.com, is focused.”
Application will be made to London Stock Exchange for the newly issued shares to be admitted to trading on AIM, with this expected to become effective on 15 December.
Subject to certain limited exceptions, the sellers and founders have agreed not to sell, transfer or dispose of the new shares for at least two years after the closing of the acquisition.