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Bragg Gaming has formed a special committee to explore strategic alternatives including a possible sale of the business.

The ad hoc special committee will be chaired by M&A expert Don Robertson and will review a range of options including a sale of the company or its assets, a merger, new financing or further acquisitions.

No timetable has been set for completion of the review, nor any decision made relating to strategic alternatives, said the business.

Bragg said it would not be providing any further comment on the status of the strategic review process at this time, but would provide updates in the future.

“While the strategic review process is ongoing, the company’s management remains committed to executing the company’s strategy and business plan with the full support of the board,” said the firm.

The formation of the committee follows a November 2023 open letter published by Jeremy Raper, CEO of Raper Capital, the second largest disclosed Bragg investor.

In the letter, Raper expressed frustration at the persistently low company valuation markets had given.

At the time the letter was written, the company’s share price stood 25% below its level at the time of the 2018 Oryx acquisition, despite a 4x revenue rise and 14x increase in EBITDA.

“Suffice to say, the public markets have had plenty of opportunity to appraise our company’s growth story, over time, and yet the record demonstrates that it will not, or cannot, accord even the lower bounds of what most shareholders would consider fair value,” he said.

As such, the investor called for a full sale of the business to realise shareholder value not provided for by the market’s assessment.

Bragg stumbles in Q4

Bragg reported €23.4m revenue in Q4 2023, down 1.4% from the same period the previous year.

The supplier said this resulted from revised commercial agreements with Entain’s BetCity to supply its PAM platform until 2025.

“[T]his extension required renegotiating terms,” said Bragg CEO Matevž Mazij. “These dynamic variables reduce customer concentration, and at the same time our broader business is thriving and poised for sustained, increasingly profitable growth.”

Mazij also highlighted broader challenges in the Dutch market, including increased competition and new regulations since July 2023.

These have included a phased ban on “untargeted” advertising and several safer gambling changes.

Bragg said it expects the challenges to persist, with “further adjustments” anticipated in 2024.

The Q4 issues also extended to EBITDA, which declined 23.7% year-on-year to €2.8m.

Continued growth throughout FY23

On an annual basis, the results were more positive for Bragg.

The company recorded €93.5m revenue for the year, up 10.4% from 2022, while EBITDA also rose 26.3% to €15.2m during the year.

Despite this, the company’s loss widened to €3.8m, compared to the €3.5m reported in the same period the previous year.

This reduced total was primarily driven by interest and other financing charges.

“Our strategic actions have positioned Bragg as an essential content source for leading international iGaming operators, strengthening our groundwork for consistent and profitable development,” said Mazij.

“With confidence, we affirm our readiness with the appropriate strategies, financial strength, and infrastructure to maintain our business momentum while executing initiatives that foster cash flow growth and generate added value for our shareholders.”

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