Gambling.com Group acquires Odds Holdings for up to $160 million By Investing.com

CHARLOTTE, N.C. – Gambling.com Group (NASDAQ: GAMB), a provider of digital marketing services for the global online gambling industry with impressive 91.6% gross profit margins and strong recent momentum evidenced by a 68% price return over the past six months, has entered into a definitive agreement to acquire Odds Holdings, Inc. According to InvestingPro analysis, the company currently appears undervalued, with 11 additional ProTips available for subscribers. The acquisition, which is expected to close on January 1, 2025, will see Odds Holdings stockholders receive $80 million initially, with the potential for an additional $80 million tied to performance through the end of 2026.

Odds Holdings operates a technology platform for real-time odds data and services under multiple consumer and enterprise brands, including its flagship OddsJam. This platform processes over one million requests per second and multiple terabytes of data daily across nearly 300 sportsbooks.

The transaction is set to expand Gambling.com Group’s online gambling industry footprint, adding new recurring revenue streams from both consumer and enterprise clients. It is anticipated to be immediately accretive to the company’s operating results upon closing. The company has demonstrated strong execution capability, with revenue growing 27.6% over the last twelve months to $124.4 million. For deeper insights into GAMB’s growth trajectory and comprehensive valuation analysis, InvestingPro subscribers can access the detailed Pro Research Report, part of the platform’s coverage of over 1,400 US stocks. For 2024, Odds Holdings is projected to generate approximately $26 million in revenue and $12 million in Adjusted EBITDA. With the acquisition, Gambling.com Group expects at least a 20% growth in Adjusted EBITDA from the Odds Holdings assets in 2025.

The Odds Holdings team, including founders Ankit Goyal and Alex Monahan as well as CEO Matt Restivo, will join Gambling.com Group. The initial purchase consideration will be composed of $70 million in cash and $10 million in Gambling.com Group ordinary shares. The cash payment will be funded through borrowings under the company’s expanded credit facility, which includes a commitment from Wells Fargo (NYSE:) Bank for a senior secured term loan and revolving credit facility of at least $100 million.

This strategic move aligns with Gambling.com Group’s goal to reach $100 million in annual Adjusted EBITDA and is consistent with their strategy to broaden their influence in the online gambling industry. The acquisition is subject to customary closing conditions. With a current market capitalization of $465 million and a “GREAT” financial health score from InvestingPro, the company appears well-positioned to execute this strategic acquisition while maintaining its strong balance sheet metrics.

The information reported is based on a press release statement.

In other recent news, Gambling.com Group experienced robust growth in its third-quarter performance, leading to a revision in the company’s stock price target by Truist Securities. The firm raised the price target from $13.00 to $16.00, maintaining a Buy rating on the company’s shares. This adjustment comes after Gambling.com reported a record Q3 revenue of $32.1 million, marking a 37% increase from the same period last year, and a significant rise in its adjusted EBITDA, which reached $12.6 million, a 108% increase year-over-year.

These strong results are primarily attributed to a diversified market presence and a strategic focus on casino operations. Consequently, Gambling.com revised its full-year revenue forecast to between $125 million and $127 million and raised its adjusted EBITDA outlook to a range of $46.5 million to $48.5 million. The company also repurchased over 8% of its outstanding shares since November 2022.

Despite challenges in North America, Gambling.com is confident in its growth strategy and plans to enter new markets in 2025, such as Colombia and Peru. The company also anticipates developments in the regulatory landscape in Brazil. Truist Securities highlighted Gambling.com’s standout performance in a sector where competitors have faced challenges, expressing confidence in the company’s market position and growth prospects.

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