TIDMB90
RNS Number : 7063F
B90 Holdings PLC
12 July 2023
FOR RELEASE: 07.00, 12 July 2023
B90 Holdings plc
("B90" or the "Company")
Acquisition of Emwys and Related Licence Agreement
Further CLN issue
B90 Holdings plc (AIM: B90), the online marketing and operating
company for the gaming industry, is pleased to announce that it has
entered into a share purchase agreement with Funko International AB
("Funko") to acquire the entire share capital of Emwys AB
("Emwys"), a Swedish marketing company that specialises in
pay-per-click (PPC) marketing in the online gambling sector (the
"Acquisition"). In conjunction with the Acquisition, B90 and Funko
have also entered into a short term associated licence and
marketing agreement with regard to Funko's Google advertising
account used by Emwys for PPC marketing (the "Google PPC Account"),
currently conducted in the Finnish market (the "Licence Agreement"
and, together with the Acquisition, the "Transaction").
The Transaction will provide B90 with a significant asset to
enhance its marketing capabilities and generate future revenue
through strategic affiliate partnerships. The expected closing date
for the Acquisition is no later than 1 September 2023 (the "Closing
Date").
Emwys and the Acquisition
The total consideration payable by B90 under the Acquisition is,
in aggregate, up to EUR3.6 million for Emwys' entire share capital
on a cash free and debt free basis. The initial consideration
payable is an immediate payment of EUR500,000 in cash and
EUR250,000 in the form of convertible loan notes (the "CLNs"), both
of which are non-refundable . The balance consideration is payable
on the Closing Date, subject to certain performance conditions
being achieved, and consists of EUR1.25 million in cash and EUR1.6
million either in the form of CLNs or the issue of new ordinary
shares in the Company at the closing mid-price on the business day
prior to the Closing Date (with any such shares subject to a
3-month lock-in period), at the election of the Company. The cash
element of the initial and balance consideration is intended to be
funded from the proceeds of the Subscription announced to market on
30 June 2023, with the final instalment of the EUR2 million to be
received shortly, following which the CLNs will be issued and the
market updated . Alternatively, the Company can elect to settle the
entire balance consideration for EUR2.25 million in cash at the
Closing Date, subject to available cash balances. The assets being
acquired are expected to be positive cash flow generating in Q4
2023.
The CLNs have a term of three years from issue and are
convertible no earlier than 31 December 2023, at the request of the
CLN holder, at a 10% discount to the volume weighted average price
for the five trading days prior to the conversion notice. The CLNs
are convertible, at the discretion of the Company, at any time and
on the same terms. The CLNs carry a coupon of 10% per annum, which
shall accrue and be paid in cash or shares at the Company's
election, upon redemption or conversion.
To date, Emwys has been focused on marketing online gambling
services in Finland, and B90 plans to expand into new territories
using the knowledge and assets acquired in order to drive traffic
and boost revenues for its existing and new affiliate accounts. By
utilising Emwys' expertise, B90 aims to maximise its reach and
capitalise on the growing demand for online gambling marketing
services. The Acquisition includes Emwys' valuable marketing tools,
business contracts, domains, and other necessary administrative
rights.
For the year ended 31 December 2022, Emwys' unaudited profit was
approximately EUR0.06 million and as at 31 December 2022, had net
assets of approximately EUR0.07 million.
As part of this transaction, Emwys AB is transferring sought
after knowledge and experience in the field of PPC marketing. PPC,
or pay-per-click marketing, is a method of paid advertising which
enables a website to rank higher and appear among the top search
results in Google. It allows companies to bid on keywords to target
specific audiences, yielding focused and more significant
responses.
Licence Agreement
The Licence Agreement grants B90 an exclusive licence for the
use of the Google PPC Account and seeks to regulate the cooperation
in generating and sharing revenues.
During July and August 2023, the revenues generated from revenue
sharing agreements shall be accrued with Funko receiving 75% and
B90 receiving 25% on all marketing activities undertaken using the
Google PPC Account. In addition, B90 shall receive 100% of the
marketing revenue payable per qualified depositing customer (CPA
revenue) at a third party marketing partner as a result of
operating the Google PPC Account, up to the equivalent amount B90
has invested in the month prior, and any such revenue exceeding
that amount will be shared equally between Funko and B90. It is
intended that the Google PPC Account will be transferred to B90 or
Emwys following the Closing Date and B90 will then receive 100% of
revenues generated by Emwys making use of the Google PPC Account;
alternatively, the Company may enter into a new perpetual licensing
agreement with Funko.
During July and August 2023, B90 has undertaken to invest not
less than EUR250,000 per month in the Google PPC Account, pro rated
as necessary, such amount to be recovered before any revenue share
referred to above.
If closing of the Acquisition has not occurred by 1 September
2023, the Licence Agreement shall be automatically terminated with
immediate effect and no further consideration will be payable by
B90.
Further CLN issue
The Company has also raised a further GBP300,000 through a
subscription for CLNs by an existing investor in the Company.
The CLNs have a term of three years from issue and are
convertible no earlier than 1 January 2024 , at the request of the
CLN holder, at a 10% discount to the volume weighted average price
for the five trading days prior to the conversion notice. The CLNs
are convertible, at the discretion of the Company, at any time and
on the same terms. The CLNs carry a coupon of 10% per annum, which
shall accrue and be paid upon redemption or conversion.
Commenting on the Acquisition, Ronny Breivik, Executive Chairman
of B90, said:
"The acquisition of Emwys presents substantial opportunities for
B90. It is a step change for our business both in terms of scale
and operations. By acquiring new knowledge and investing in this
proven marketing concept, we aim to drive strong revenue growth
whilst continuing to generate profits from our existing marketing
operations."
"This is an important first step in our 'buy and build' M&A
strategy. We will seek to scale our business rapidly b y following
a strategic and deliberate approach to actively pursue selective
acquisitions and other opportunities, such as entering license
agreements with businesses in our sector which seek operational
knowhow and distribution capabilities."
The information communicated in this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended.
-ends-
For further information please contact:
B90 Holdings plc +44 (0)1624 605 764
Ronny Breivik, Executive Chairman
Strand Hanson Limited (Nominated
Adviser) +44 (0)20 7409 3494
James Harris / Richard Johnson
/ Rob Patrick
Zeus Capital Limited (Joint
Broker) +44 (0)20 3829 5000
Louisa Waddell / Tim Dainton
Panmure Gordon (UK) Limited
(Joint Broker) +44 (0)20 7886 2500
Simon J French
Belvedere (Financial PR & IR) +44 (0)20 3008 6864
John West / Llewellyn Angus
About B90 Holdings plc
B90 Holdings plc is a leading company in the online gambling
industry, focused on the operation of its own online Sportsbook and
Casino product as well as marketing activities for other online
gaming companies. We specialise in providing innovative gaming
experiences and state-of-the-art technology solutions. With a
strong focus on customer satisfaction and responsible gambling
practices, B90 Holdings is dedicated to shaping the future of the
online gaming landscape.
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END
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