Golden Matrix Group Inc (GMGI) has amended the terms of its previously announced acquisition of MeridianBet Group.

GMGI is a Nasdaq-listed iGaming and ecommerce company based in Las Vegas, offering a combination of B2B and B2C products.

The firm’s B2B division develops and licenses proprietary gaming platforms for an “extensive” list of clients, while its B2C division RKings operates a high-volume ecommerce site enabling users to enter paid-for prize draw competitions in authorised markets.

GMGI also owns and operates Mexplay, a regulated online casino brand in Mexico.

MeridianBet, meanwhile, is a B2C online sports betting and iGaming group originally founded in 2001 and headquartered in Malta.

The business currently operates in 15 jurisdictions across Europe, Africa and South America, with an omni-channel approach covering retail, desktop online and mobile.

Acquisition background

GMGI first agreed to acquire MeridianBet in January this year, in a cash and stock transaction valued at around $300m.

GMGI said at the time that the deal would provide it access to new and fast-growing B2C markets across Europe, Africa and Latam.

The transaction was also set to create “a combined group of profitable and cash positive companies with enhanced buying power,” thus providing GMGI with an “increased competitive edge” in the sector.

As a result, following the transaction, GMGI said it would be positioned for further organic and inorganic growth, while benefiting from “synergetic growth opportunities” in the companies’ key markets.

Combined, the two businesses were estimated to generate full-year 2022 revenue of over $100m, with EBITDA of more than $22m for the year ended 31 October 2022.

Both companies plan to continue operating under their respective brands following completion of the acquisition.

Revised deal terms

While the original acquisition was expected to close in the first half of 2023, the amended deal extends that closing date while also modifying certain terms of the previously announced agreement.

Among other changes, the cash required to be paid by GMGI at closing has been reduced from $50m to $30m.

GMGI said it “is currently working to obtain the financing required to complete the transaction and plans to file the required proxy statement to seek shareholder approval for the acquisition, among other items, in the third quarter of 2023.”

The revised deal is now expected to close in either Q3 or Q4 this year, subject to various closing conditions.

“In consideration of the reduced cash amount required to be paid at the closing of the transaction, the revised cash and stock transaction now has a value of approximately $331m,” said GMGI CEO Anthony Brian Goodman.

Explaining the increased overall value of the deal, Goodman set out how MeridianBet had exceeded expectations since the original deal was first signed.

“MeridianBet has increased its year-to-date revenues considerably against last year’s revenues and the pro-forma performance of the combined company following the acquisition is now projected to be approximately $31m in adjusted EBITDA for the October 31, 2023 year, and approximately $139m in revenues, based on MeridianBet’s year-to-date financial statements and financial projections. 

“MeridianBet’s impressive performance thus far in 2023 gives us even greater confidence in the value of this acquisition, which is expected to bring significant benefits to GMGI from both a financial and operational standpoint, and our management team is confident it will drive long-term value for all our stakeholders,” Goodman concluded.