XLMedia Announces Asset Sale to Gambling.com for $42.5 Million

In December, XLMedia had hinted at its intention to explore asset sales as a means to bolster shareholder returns. The sale to Gambling.com, a prominent player in performance marketing and sports betting media, marks a significant step in this direction. For the fiscal year ending December 2023, the assets in question are projected to generate revenue of $21.4 million and an adjusted EBITDA of $6.6 million.

Utilization of Proceeds for Growth and Returns

XLMedia has outlined a clear plan for the utilization of the proceeds from this transaction. The company intends to allocate the funds towards covering the costs associated with the asset transition, fulfilling the final deferred payment for a previous US acquisition, settling outstanding tax obligations, and bolstering the working capital for its North American operations. A portion of the proceeds will also be returned to shareholders, reaffirming XLMedia’s commitment to delivering value.

Marcus Rich, XLMedia’s Chairman, expressed his satisfaction with the deal, stating, “The board believes the sale of these assets, which is approximately two times the current market capitalisation of the whole company, is an excellent outcome for XLMedia and its shareholders. Importantly, this transaction will allow the company to clear legacy liabilities, provide working capital and return cash to shareholders.”

Focus Shifts to North American Expansion

Following the completion of the sale, XLMedia plans to reorganize its operations to concentrate more on the North American market. The company’s strategy in this region is geared towards expanding its sports content footprint, deepening audience engagement, and diversifying revenue streams to ensure more predictable and stable income. Additionally, XLMedia aims to leverage high-quality content and consumer-engaging features to drive growth in the gaming sector within select markets, capitalizing on the high-margin opportunities this vertical offers.

The announcement had an immediate positive impact on XLMedia’s stock, with shares surging by 98% to 12.38p by 1350 GMT.

Our Comment on the Article

The sale of XLMedia’s European and Canadian assets to Gambling.com represents a pivotal moment for the company, signaling a strategic pivot towards the lucrative North American market. This move not only underscores XLMedia’s commitment to streamlining its operations and focusing on core growth areas but also highlights the dynamic nature of the iGaming and digital sports betting landscape. As the industry continues to evolve, such strategic realignments are essential for companies looking to maximize their competitive edge and shareholder value in an increasingly crowded marketplace.