XLMedia, a major player in the affiliate gaming industry, has successfully completed the divestment of three of its European gaming domains and their associated websites. This transaction, which involved the sale of Casino.se, Casino.gr, and Casino.pt to Beach Services, has secured a noteworthy upfront cash consideration of (US) $4 million.
From a financial standpoint, the combined revenue generated by the three websites in the year 2022 amounted to (US) $840,000, accompanied by a gross profit of approximately $750,000. This implies that the sale values these assets at a multiple of 4.7 times their revenue. It is worth noting that the previous earnings derived from these brands accounted for approximately 6 percent of XLMedia’s overall European casino revenue, which stood at (US) $14.3 million in 2022.
Performance exceeds expectations
Despite parting ways with these specific assets, XLMedia will continue to operate its gaming business in Sweden and other European markets. In fact, the company has expressed contentment with its performance in these regions, which is currently surpassing management expectations to a slight extent. The infusion of cash resulting from the sale will make an impact on the company’s working capital and facilitate further investments in its expansion efforts within the North American sports and iGaming markets. Moreover, XLMedia aims to leverage the proceeds from the sale to advance its portfolio in the European Union.
The success of this divestment follows? XLMedia’s recent decision to part ways with its unprofitable Personal Finance business, which yielded (US) $2.05 million. These strategic moves highlight the company’s unwavering commitment to maximizing returns and optimizing its operational structure.
In a notable shift, XLMedia has recently restructured its business strategy, pivoting its primary focus away from European iGaming markets and redirecting its attention towards the flourishing US sports betting sector. The outcomes have been remarkable, with the company’s North American revenue surging to an impressive (US)? $47.7 million in 2022. This figure represents a remarkable year-on-year growth rate of nearly 115 percent and accounted for approximately 65 percent of the company’s total group revenue.
Media partnerships in USA
XLMedia’s success in North America can be attributed, in part, to the establishment of significant media partnerships within the United States. Collaborations with globally recognized publishing brand Newsweek and Advance Local, one of the largest media conglomerates in the country, have proven instrumental in the company’s expansion. These partnerships have enabled XLMedia to tap into diverse audiences across multiple states. Additionally, in May, the company extended its exclusive sports betting and iGaming partnership with Schneps Media, owner of New York news website amNY.com.
The money dervied from the sale sale will be used for additional working capital, and to fund further investment to expand its North American Sports and Gaming footprint and to advance its EU portfolio. XLMedia shares were trading 12% higher at 10.90 pence each in London .
Restructuring and expansion
The company made significant changes to its senior management team over the last year, welcoming CEO David King and CFO Caroline Ackroyd. Other appointments included Karen Tyrrell as Chief People and Operations Officer, Elizabeth Carter as CMO, and Peter McCall as Company Secretary and Group Legal Counsel. Staff numbers were reduced throughout the year, starting with 267 employees and ending with 193, as part of the company’s streamlining efforts.
XLMedia anticipates a more stable operational base moving forward as it concludes its major program of change. The company’s North American assets, including CBWG, Sports Betting Dime, and Saturday Football Inc., have been integrated into the core business, and Kevin Duffey assumed the role of President of XLMedia North America in early 2023.
Looking ahead, XLMedia aims to leverage the possibilities offered by new AI technologies to enhance its content creation and optimization. By combining high-quality content that meets expertise, experience, authority, and trust criteria with AI tools, the company believes it can provide users with a more comprehensive experience. XLMedia’s current trading outlook indicates a strong start to 2023, with Ohio and Massachusetts going live, and the business continues to explore opportunities for expansion in the US iGaming market, as well as transitioning to revenue-sharing agreements with operators.
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