Catena Media has agreed to sell two brands for a total of €19.8m. One transaction has already been completed, and the other will be finalized by the end of 2023.
Oddschecker Global Media has purchased the flagship Superscommesse brand. This marks Catena Media’s exit from Italy and the completion of their strategic review initiated in May 2022.
Catena Media has sold a total of €76.0m in assets since their review began, including the €45.0m divestment of AskGamblers to GiG in December 2022.
The review aims to streamline the business and focus on stable markets, primarily in the Americas. The proceeds from the sales will be used to repay debt and reduce the leverage ratio.
The Italian operation generated revenue of €7.8m and EBITDA of €3.4m in the 12 months leading up to September 2023. The sale of the Italian business will result in an impairment charge of €2.7m.
The group also announced a 28% year-on-year drop in revenue, mainly due to transitioning contracts in North America from CPA to revenue share.
At the end of September, the reported net debt was €25.4m. However, after accounting for scheduled divestment proceeds of €46.6m from 2023 to 2025, the group had a net cash position of €21.2m.
Catena Media’s CEO, Michael Daly, emphasized a focus on the Americas and expressed satisfaction with the outcome of the Italian brand sale.
The purchase prices for the sales will be paid in three tranches, with €12.8m due in October and November 2023, €3.5m in Q4 2024, and €3.5m in Q2 2025.
Since May 2022, Catena Media has completed several deals, including the sale of UK and Australia assets for €6.0m and other assets worth €5.2m. The company has expanded its operations to 27 US states and Canadian provinces.
A SEK100m share buyback program has been initiated, and new shares have been issued. The group expects cost savings of approximately €3.8m-€4.2m by streamlining support functions in their European operations.
Catena Media recognizes the short-term earnings impact in Q3 and aims to achieve a stronger financial position for a more sustainable revenue model. Revenue from continuing operations was €15.9m, with a 28% decline.
In North America, revenue fell by 29% to €13.3m due to increased competition and operators cutting marketing spend. Operators lowered CPA rates, resulting in a decrease in revenue from sports betting.
About 17% of new depositing customers in North America were recruited under a revenue share model in Q3. This transition aims to secure more sustainable revenue over time.
Adjusted EBITDA from continuing operations decreased by 65% to €3.1m, with a margin of 19%. Catena Media expects increased competitive pressure in the industry as new players enter the market through state legalization processes.
