FansUnite Sells Wholly Owned Subsidiary McBookie Ltd.
Vancouver, British Columbia–(May 2, 2023) – FansUnite Entertainment Inc. (TSX: FANS) (OTCQX: FUNFF) (“FansUnite” or the “Company”) is pleased to announce the signing of a definitive agreement dated May 1, 2023 (the “Definitive Agreement”) pursuant to which the Company has sold to an arm’s length third-party (the “Transaction”) all of the shares in its wholly owned subsidiary, McBookie Ltd. (“McBookie”), a Scottish private limited company.
FansUnite acquired McBookie in March 2020 for $2.2 million CDN in total consideration, including $1 million CDN in cash. Three years later, FansUnite will recognize a significant profit, selling McBookie for more than $5 million CDN1 in cash, over 7x their record 2022 EBITDA2.
McBookie, the dominant Scottish-focused sportsbook and online casino in the UK, has delivered three consecutive years of revenue growth. Under FansUnite’s ownership, McBookie 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 has seen increases in new player signups, retention, and brand recognition.
“This is a great deal and outcome for McBookie and for FansUnite,” said Scott Burton, CEO of FansUnite. “We began a path of streamlining and focusing our business in 2022. With the UK continuing to tighten regulations on gaming operations, we felt it was time for FansUnite 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 U.S. marketplace and affiliate opportunities. This sale will strengthen FansUnite’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 and wish them well as they continue to grow the McBookie brand.”
As per the terms of the deal, Petrie and Walker will continue to serve as Directors at McBookie.
Through McBookie, FansUnite held a remote gambling software license and remote betting license from the UK Gambling Commission enabling the Company to serve as a Business-to-Consumer (“B2C”) operator and Business-to-Business (“B2B”) technology provider in the U.K online gambling market.
Pursuant to the terms of the Definitive Agreement, the Company sold all of the issued and outstanding shares of McBookie to an arm’s length private party (the “Buyer”) for total cash consideration of US$4,016,544, subject to a working capital adjustment (the “Purchase Price”). 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
1 Purchase price is US$4,016,544 which converts to more than $5M based on the most recent exchange rates available.
2 EBITDA is a non-GAAP measure that is defined on page 24 in the Company’s most recent Management Discussion and Analysis, released March 30, 2023 (the “MD&A”), and is hereby incorporate by reference. The MD&A is available on SEDAR at www.sedar.com.
About FansUnite Entertainment Inc.
FansUnite is a global sports and entertainment company, focusing on technology related to regulated and online gaming. FansUnite’s one-of-a-kind iGaming platform Chameleon offers operators a full suite of gaming solutions with a sports and esports focus geared for the next generation of online bettors and casino players. Along with providing B2B technology solutions, FansUnite is the parent company of North American-focused American Affiliate, which operates leading affiliate brands such as Betting Hero and Props.com.
FORWARD-LOOKING STATEMENTS: Certain information contained herein may constitute “forward-looking information” and “forward-looking statements” with the meaning of applicable Canadian and U.S. securities legislation (collectively, “forward-looking statements”). Generally, forward-looking statements can be identified by the use of forward-looking terminology such as “believes,” “belief,” “expects,” “intends,” “anticipates,” “potential,” “should,” “may,” “will,” “plans,” “continue” or similar expressions to be uncertain and forward-looking. Forward-looking statements may include, without limitation, statements relating to future outlook and anticipated events such as: intended use of proceeds from the Transaction; Purchase Price payable, including future working capital adjustments; business development plans of FansUnite, including future acquisitions of technology platforms and assets with high growth potential in new or developing markets and refocusing its resources within its existing business segments; and the Company being cash flow positive in the future, if at all. FansUnite’s ability to fulfill technology needs with its platform; the Company’s unique portfolio of assets; and discussion of future plans, projections, objectives, estimates and forecasts and the timing related thereto. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results, level of activity, performance or achievements may differ materially from those expressed or implied in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: inability to obtain or maintain license(s); risks related to global pandemics, including the novel coronavirus (COVID-19) global health pandemic, and the spread of other viruses or pathogens; and influence of macroeconomic developments. Additional information regarding the risks and uncertainties relating to the Company’s business are contained under the heading “Risk Factors” in the Company’s Annual Information Form dated, March 30, 2023 as filed on its issuer profile on SEDAR at www.sedar.com. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this news release. FansUnite disclaims and does not undertake to update or revise any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.