The BetMakers Technology Group Ltd (ASX: BET) share price is on the move on Tuesday following an acquisition update.
At the time of writing, the betting technology company's shares are up 5.5% to 75.5 cents.
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What did Betmakers announce?
This morning the company announced that UK-based Sportech has received shareholder approval for the divestment of its Racing and Digital assets to BetMakers for a total consideration of 30.9 million pounds.
This was the only condition precedent to completion of the acquisition. In light of this, BetMakers will now make a non-refundable initial payment of 6.2 million pounds, with the balance of 24.7 million pounds payable upon completion of the acquisition.
This will occur following satisfaction of certain customary conditions that only BetMakers can waive at its discretion, including transfer of licences.
This acquisition is being funded by a $50 million placement, which is due to settle on 31 December, and a $10 million share purchase plan.
Why is BetMakers acquiring Sportech's Racing and Digital assets?
Management notes that the acquisition of Sportech's Racing and Digital assets enables BetMakers to accelerate its international growth plans.
It also strategically positions the company to capitalise on emerging opportunities in the U.S. market, including fixed odds wagering.
The company has previously revealed that the deal had the potential to be a game-changer financially.
For example, on a pro-forma basis for FY 2020, acquired assets and with BetMakers' existing operations would have delivered $56.1 million revenue and $7.7 million EBITDA.
As a comparison, BetMakers' recorded stand-alone revenue of $9.2 million and EBITDA of $0.8 million in FY 2020.
When first announcing the proposed acquisition, 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 concluded.
