Super Group has struck a €140m deal to assume full control of its sportsbook software technology in a move CEO Neal Manashe says will offer “maximum flexibility" for organic growth and M&A opportunities.
The Betway parent company’s sportsbook tech is currently licensed by Apricot, Super Group’s long-standing software partner.
However, Super Group said in a statement that it wants to apply the tech stack to “any properties it may buy or build in the future.”
The upfront cost of the deal is €100m, which will be paid through the cancellation of an outstanding loan. Super Group will pay the remaining €40m in two equal instalments over the next two years, up to €20m of which may be paid in the group’s ordinary shares.
Menashe labelled the deal an “exceptional opportunity,” adding the two companies have been “working closely to agree to an equitable deal with favourable structure for both parties.”
“We’ll continue to deliver the best sports betting and gaming experience to our customers around the world as the benefits of this deal are realised,” he said.
Super Group could make additional payments of up to €210m through an earn-out mechanism dependent on Super Group’s sportsbook revenues more than doubling during the earn-out period until the end of 2025.
The earn-out is calculated as a percentage of monthly sportsbook net gaming revenue, ranging from a low single-digit to high single-digit percentage.
The deal is subject to supplemental licensing from relevant gambling regulators, which Super Group said are expected to take between six and 12 months to obtain.
Super Group announced the deal for its sportsbook tech stack after revealing Q1 revenue of €379.3m, its highest-ever Q1 revenue.
Profit of €41m included a pre-tax gain of €40.1m relating to the sale of its B2B division of Digital Gaming Corporation to Games Global, which completed in February.
But despite adjusted EBITDA, excluding the US, of €68.7m, its US arm posted an adjusted EBITDA loss of €22.3m, dragging overall adjusted EBITDA down to €46.5m for the quarter.
Menashe said: “We've had a phenomenal start to the year, continuing our momentum from a strong end to 2023.
“This robust performance has been delivered by our global team’s ongoing focus and investment into core markets that are yielding strong returns, providing us with a solid foundation for the remainder of the year.”
Chief financial officer Alinda van Wyk added that Super Group remains “confident that we are in a strong position to realise our goals set for 2024.”
“Our laser focus on creating a leaner, more efficient operating model has delivered results, with Q1 operating expenses as a percentage of net revenue falling to below 19 per cent,” she said.
