Affiliate marketing group Acroud has said it is considering a potential accretive acquisition within the affiliation and media space worth €5.5m (£4.7m/$5.8m).
Acroud AB (publ) (“Acroud” or the “Company”) continues to have an opportunistic approach to M&A in line with its strategic agenda and is now considering a potential accretive EUR 5.5 million acquisition within the affiliation and media space, expected to contribute over EUR 9 million to the Company’s revenues and over EUR 4 million to the Company’s EBITDA annually.
Acroud’s management is of the view that the potential acquisition will be accretive for both equity and debt investors in the Company as it will strengthen both profitability and cash flow while reducing the Company’s leverage going forward, which is in line with the revised financial targets as presented in a press release on 4 May 2022. The potential acquisition comprises of affiliation assets within the iGaming market. If the potential acquisition materialises, the transaction will see the Company investing approximately EUR 1million in shares and approximately EUR 4.5million in cash, payable over a period of 18 months. The cash payment is expected to be financed via Acroud’s existing cash and future operational cash inflow. The potential acquisition is subject to a final board approval and the parties entering into a definitive purchase agreement.
Acroud did not disclose details regarding the identity of the property it could purchase but did state that the acquisition comprises affiliation assets within the igaming market.
The group added that the acquisition would contribute over €9.0m million to its annual revenue and more than €4.0m to its earnings before interest, tax, depreciation and amortisation (EBTIDA).
Should the deal go ahead, Acroud would invest approximately €1.0m in shares and €4.5m in cash, payable over a period of 18 months. The cash payment would be financed via Acroud’s existing cash and future operational cash inflow.
The potential acquisition is subject to a final board approval and the parties entering into a definitive purchase agreement.
“Acroud’s management is of the view that the potential acquisition will be accretive for both equity and debt investors in the company as it will strengthen both profitability and cash flow while reducing the company’s leverage going forward, which is in line with the revised financial targets,” the board said.
Acroud in May projected its full year 2022 EBITDA would reach between €8m and €10m. If earnings were to fall within this range, this would be at least 70.2% more than in 2021 when EBITDA came to €4.7m.
The group’s board also released targets for the future of the business, stating it is aiming for a 20% organic growth in EBITDA, on average, during the financial years from 2023 to 2025. This would suggest EBTDA of between €13.8m and €17.3m by 2025.
The business is also aspiring to decrease its net debt to adjusted EBITDA ratio to a maximum of 2.5 times by December 2025, by conducting operations “at low financial risk”.
Later in May, Acroud reported a year-on-year increase in revenue and net profit for the first quarter of its 2022 financial year, with further growth forecast for the remainder of the year.
Revenue for the 12 months through to 31 March 2022 amounted to €7.0m, up 25.0% from €5.6m in the same period last year, while net profit jumped 649% to €1.2m.
Source: https://igamingbusiness.com/acroud-considers-e5-5m-affiliate-acquisition/ and https://www.acroud.com/en/cision/A03587CA6D458B33/
