iGaming tech company Gaming Innovation Group (GiG) has announced the successful completion of its acquisition of KaFe Rocks, an online casino affiliate. The EUR 35 million ($38.5 million) deal, announced in November, is seen as a strategic move by the Malta-based firm to strengthen its position in the North American market.
Coming on the heels of GiG’s purchase of AskGamblers, also a casino affiliate, this deal with KaFe Rocks aligns with GiG Media’s overarching strategy to diversify business and emerge as a dominant force in online casino affiliation.
GiG Media is hedging on two crucial assets of KaFe Rocks—its proprietary media and marketing technology—to drive substantial growth post-acquisition. The purchase allows GiG to have more customers, websites, and markets to drive revenue growth going forward.
The company anticipates that synergies with KaFe Rocks will enable GiG to generate a minimum revenue of EUR 23 million ($25.3 million) in 2024 for the acquired assets and an EBITDA margin exceeding 45%. If these projections materialize, it would translate to a 2024 EV/EBITDA multiple of approximately 3.6x for the acquisition.
“Our goal is to maintain our position as the leading casino affiliate in the industry and to expand further in the North American market. The inclusion of KaFe Rocks aligns perfectly with these objectives,” said Jonas Warrer, Group CEO of Gaming Innovation Group.
“We’ve identified a thriving business led by an exceptionally skilled team. We eagerly anticipate integrating KaFe Rocks into the GiG family, unlocking additional business value to benefit our partners and investors.”
This deal comprises an initial cash payment of EUR 15 million ($16.5 million) and an additional EUR 20 million ($22 million) to be distributed in four semi-annual installments over the next 24 months.
Moreover, GiG has the option to issue EUR 2.5 million ($2.75 million) in GiG shares to the sellers in Q1 2024, contingent upon achieving specific operational cost savings targets by the end of 2023. The number of shares to be issued will be determined based on a 30-day VWAP of the GiG share at the time of closing.
The consolidation of KaFe Rocks’ assets is effective as of today.