Gaming Innovation Group: Picking up CTM assets - ABG

Seizes the opportunity to buy media assets from CTM
Following Catena Media's strategic review, which included the consideration of divesting some of its assets, GiG has taken the opportunity to expand its media business, acquiring e.g., the global brand AskGamblers. The total consideration is EUR 45m, and will be paid out in three tranches over a period of 24 months, which looks favourable to GiG. The deal will be financed through a combination of its cash flow, a new RCF, and an equity issue which we do not know the size of yet. The total implied multiple corresponds to ~4x EV/EBITDA, which we believe looks reasonable given that the assets acquired have seen double-digit declining top lines. However, we believe there are synergies to exploit, for instance utilising its tech and content creation like it did successfully in casinotopsonline.com, while expanding the assets to new geographies that the assets previously did not receive revenues from.

Acquisitions likely to add ~20% to cons '23e EBITDA
Given the information we know, the likely cons impact on '23e EBITDA should be around +20%, in our view. The assets generated EUR 12.9m and EUR 8.4m in revenue and EBITDA during the first three quarters of 2022, respectively. GiG expects to have an EBITDA margin between 60-70% from the assets going forward, which is in line with the YTD margin of 65%.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/gaming-innovation-group/Equity-research/2022/12/gaming-innovation-group---picking-up-ctm-assets-/