The BetMakers Technology Group Ltd (ASX: BET) share price will be one to watch later this week when it returns from its trading halt.
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Why is the BetMakers share price in a trading halt?
This morning the betting technology company requested a trading halt whilst it launched an equity raising to fund a major acquisition.
According to the release, the company has entered into binding agreements to acquire global assets of leading international online sports betting company Sportech PLC for A$56.2 million on a cash-free, debt-free basis.
Management advised that the proposed acquisition of Sportech's Racing and Digital assets in the United States, United Kingdom, and Europe is intended to accelerate BetMakers' international growth plans.
It will significantly expand its global customer base and strategic position to fully capitalise on emerging opportunities in the U.S. market. This includes fixed odds wagering.
The acquisition is expected to deliver substantial revenues and earnings before interest, tax, depreciation and amortisation (EBITDA) for BetMakers' business.
Management advised that on a pro-forma basis for FY 2020, the Tote and Digital Business combined with BetMakers' existing operations would have delivered A$56.1 million revenue and A$7.7 million EBITDA.
This compares to BetMakers' stand-alone revenue of A$9.2 million and EBITDA of A$0.8 million.
In addition to this, the company expects to derive strong growth from the Tote and Digital Business, including from synergies and cross-selling opportunities.
"Supercharge" US entry.
BetMakers' Managing Director, Todd Buckingham, commented: "This Acquisition will supercharge our entry into the U.S. and position the Company for substantial growth on the back of the emerging wagering opportunities in U.S. racing, including Fixed Odds, where we believe we are well placed."
"The Acquisition would give us a meaningful presence in the U.S., including in 36 of the States and across more than 200 venues, 25 digital outlets and 9,000 betting terminals. It will also greatly expand our global customer base across the UK, Europe and Asia and provides us with an opportunity to expand our product offering at scale in these and other regions," he added.
Equity raising.
To fund the acquisition, BetMakers is aiming to raise a total of $60 million. This will be via a fully underwritten $50 million placement and a $10 million share purchase plan.
These funds will be raised at 60 cents per share, which represents a 9.1% discount to its last close price.
