TopBetta, the ambitious Australia-listed online bookmaker, has announced it will acquire Melbourne-based start-up Mad Bookie.
TopBetta said its TopBetta Pty Ltd subsidiary had agreed terms with the Melbourne outfit, which will retain its existing brand identity at MadBookie.com following the takeover.
TopBetta builds proprietary online gambling platforms that merge online sports and race betting with fantasy betting, allowing gamblers to compete against one another in a tournament-style format.
Mad Bookie, meanwhile, launched just two years ago, but has quickly acquired a strong customer base, with around 15,000 registered users. The company turns over around $80 million per year.
Creative Deal Agreed
Under the terms of the deal, TopBetta will pay Mad Bookie $100,000, with a further payment of either 24 times Mad Bookie’s average monthly net gaming revenue over the 12 months following completion of the deal, or $400,000 minus expenses that TopBetta expects to incur from integrating Mad Bookie’s operations.
The deal will also defer payment of the purchase price until after the first 12 months. This is will allow TopBetta to maintain cash flows over the initial period, said the company’s CEO, Todd Buckingham, in an official statement.
“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,” added Buckingham.
“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 as a Bookie
Mad Bookie founder and CEO, Brett Luntz, will stick around in the business, at least for the duration of the earn-out period, and will offer consulting services to both companies during this time.
“We are delighted to be joining the TopBetta group,” said Luntz. “We believe that the baseline we have set up for our loyal customer base over the past 24 months will be further enhanced through this acquisition and the synergies it delivers. We couldn’t be more excited.”
The deal is pending approval from each of Northern Territory Racing Commission, Racing Victoria and Racing NSW.
TopBetta also announced this week it had acquired global distribution rights for UK and Irish greyhound racing, which will allow its subsidiary, The Global Tote, and its commercial partners, to stream approximately 28,000 greyhound racing events each year.