Australia’s TopBetta to acquire Mad Bookie online assets

Australian sports betting operator TopBetta has announced that it has reached agreement to acquire the assets of two-year-old Melbourne online bookmaker Mad Bookie.

The deal will see TopBetta acquire Mad Bookie’s over 15,000 player database, and benefit from an annual turnover of around A$80 million achieved by the Melbourne company. Assets covered by the agreement include clients and intellectual property.

Northern Territory-licensed TopBetta advised in a press release Thursday that the deal is subject to regulatory approval by the Northern Territory Racing Commission (NTRC), Racing Victoria and Racing NSW.

After completion and for the immediate term, the Mad Bookie business will continue to operate under its established brand but under TopBetta’s existing licence held with NTRC. The company plans to align the synergies across the business’ while maintaining the unique brands of both TopBetta and Mad Bookie.

TopBetta CEO Todd Buckingham said:

“The acquisition of Mad Bookie has the potential to quickly and substantially increase turnover for TopBetta’s retail business while adding significant revenues due to higher yields and cost savings through aligning the synergies between the businesses.

“The deal will also defer payment of the purchase price until after the first 12 months, which will allow the TopBetta business to maintain cash flows over the initial period.

“To acquire a ready-made, active database like Mad Bookie’s under this arrangement makes a lot of sense in an industry that has high customer acquisition costs, and we will certainly be on the lookout for similar deals should they arise in the future, both here in Australia and Internationally.”

Mad Bookie founder and CEO, Brett Luntz, along with key staff will remain with the Mad Bookie business for at least the earn out period, with Luntz agreeing to provide consulting services to TopBetta at market rates throughout this period.

The key terms of the agreement include:

* Upon Completion, TopBetta will pay an initial instalment of A$100,000 in cash to Mad Bookie;

* The purchase price for the Mad Bookie business is to be calculated as the greater of “Purchase Price” calculated:

o 24 times the average monthly net gaming revenue (less taxes and product fees) over the 12 months after completion of the Acquisition (“Earn Out Period”) less the Initial Instalment and specified expenses incurred by Topbetta in relation to the Mad Bookie business over the Earn Out Period; and

o A$400,000 less Specified Expenses;

* TopBetta is to pay the Purchase Price at the end of the Earn Out Period in either cash, shares in the company (valued at a 10 percent discount to the 15 day VWAP) or a combination of both, to be agreed between the parties when the Purchase Price is agreed;

* If TopBetta elects not to pay the Purchase Price in full in cash, and Mad Bookie do not accept shares as payment of the Purchase Price (or part thereof), Mad Bookie may elect to purchase the Mad Bookie business from TopBetta in consideration for a payment equal to the level of funds invested by TopBetta (specifically the Instalment and Specified Expenses), in full satisfaction of TopBetta’s obligations regarding the Purchase Price.

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