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Aspire Global
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===Sports=== The Sports sub-segment was formed on the acquisition of BtoBet, a leading sportsbook platform provider, from 1 October 2020. The company had c 100 employees, mainly based in Italy and North Macedonia. The acquisition was strategically important as adding sportsbook technology meant that AG now has a presence in all the major areas of online gaming, and the presence in sports is important given its ambitions to grow in the US, which is expected to deliver significant growth in the future. Following the acquisition, management indicated that its existing sportsbook business will be migrated to BtoBet, and that Pariplay’s games and aggregation could be offered to its clients. When the acquisition was announced, BtoBet had 32 operator clients in Europe, Latin America, and Africa, but with a greater presence in emerging markets than AG had historically. Under AG’s ownership, BtoBet has made an impressive start, launching six new partner brands, and signing five new partners in Q420. These included a partnership with Betfair in Colombia in October 2020. In November, it expanded into Russia by signing a platform deal with Russian National Lottery’s Operator Sports Lotteries, followed in December by a partnership with William Hill in Colombia. In FY20, Sports contributed revenue of €2.2m and EBITDA of €0.6m, an EBITDA margin of 29% during the final quarter. On a pro forma basis, FY20’s revenue of €6.8m and EBITDA of €2.1m represented growth of c 55% and c 39% from FY19’s €4.4m and €1.5m, respectively. With a higher EBITDA margin of 29.0% than the group average, its growth will help to boost AG’s overall EBITDA margin. Edison Investment Research forecasts that AG adds 20 new partners in FY21, which is consistent with the five new partners signed, six new partners launched in Q420, the first period of ownership, and a further 15 new partners in FY22 taking the total number of partners to 73 by the end of FY22. In addition, Edison Investment Research assumes 10% growth in revenue per partner in each year. These are estimated to produce revenue of €11.5m in FY21 and €15.9m in FY22. Following more stable margins in FY21 versus FY20 as the business invests, Edison Investment Research assumes good growth in margin to 35% in FY22 as the business benefits from better operational leverage. The total consideration of €37.4m for BtoBet comprises initial cash of €15.8m, a deferred payment (after 12 months) of €4.7m and contingent consideration (two years after closing) of up to €16.9m. It represented an FY20 EV/sales multiple of 5.5x and EV/EBITD multiple of 17.9x.
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