FansUnite Entertainment Incorporated (TSX: FANS) (OTCQX: FUNFF) is pleased to announce the signing of a definitive agreement dated May 1, 2023, pursuant to which the company has sold to an arm’s length third-party all of the shares in its wholly-owned subsidiary, McBookie Limited, a Scottish private limited company.
FansUnite Entertainment Incorporated acquired McBookie Limited in March of 2020 for $2.2 million CDN in total consideration including $1 million CDN in cash. Three years later, FansUnite Entertainment Incorporated will recognize a significant profit, selling McBookie Limited for more than $5 million CDN in cash, over seven times their record 2022 EBITDA.
McBookie Limited, the dominant Scottish-focused sportsbook and online casino in the United Kingdom, has delivered three consecutive years of revenue growth. Under FansUnite Entertainment Incorporated’s ownership, McBookie Limited achieved a gross win increase of 451% and a turnover increase of 305%. Led by the strategic guidance of directors Paul Petrie and Damian Walker, McBookie Limited has seen increases in new player signups, retention and brand recognition.
“This is a great deal and outcome for McBookie Limited and for FansUnite Entertainment Incorporated,” the Chief Executive Officer for FansUnite Entertainment Incorporated, Scott Burton, said. “We began a path of streamlining and focusing our business in 2022. With the United Kingdom continuing to tighten regulations on gaming operations, we felt it was time for FansUnite Entertainment Incorporated to exit the B2C space. We will be able to focus more resources on the segments of our business that offer the highest growth potential with good margins, specifically the United States marketplace and affiliate opportunities. This sale will strengthen FansUnite Entertainment Incorporated’s balance sheet as the company moves towards being cash flow positive. I want to thank Paul and Damian for their efforts while they were part of FansUnite Entertainment Incorporated and wish them well as they continue to grow the McBookie Limited brand.”
As per the terms of the deal, Petrie and Walker will continue to serve as Directors at McBookie Limited.
McBookie Limited Business
Through McBookie Limited, FansUnite Entertainment Incorporated held a remote gambling software license and remote betting license from the Gambling Commission enabling the company to serve as a business-to-consumer (B2C) operator and business-to-business (B2B) technology provider in the United Kingdom online gambling market.
Pursuant to the terms of the definitive agreement, the company sold all of the issued and outstanding shares of McBookie Limited to an arm’s length private party for total cash consideration of US$4,016,544, subject to a working capital adjustment. The transaction is a simultaneous sign and close with the purchase price payable on closing.
Tekkorp Capital Advisors acts as a strategic advisor to the company. KWP LLP acted as legal counsel to the buyer and DLA Piper (Canada) LLP acted as legal counsel to the company.