FANSUNITE ACQUIRES AMERICAN
AFFILIATE, ACCELERATING ENTRY INTO U.S. GAMING MARKET
Vancouver, British Columbia, November 23, 2021 - InvestorsHub
NewsWire -- FansUnite Entertainment Inc.
("FansUnite" or
the "Company")
(CSE: FANS) (OTCQX: FUNFF), is pleased to announce a definitive
agreement dated November 22, 2021 (the "Definitive Agreement") pursuant to
which the Company has acquired ("Transaction") the businesses and
brands of American Affiliate LLC ("American Affiliate"). The
Transaction will result in FansUnite securing a podium position in
the U.S. online betting opportunity and will be the cornerstone of
a larger U.S. affiliate strategy going forward.
American Affiliate
Business
American Affiliate is a diverse collection of assets
dedicated to generating new depositing customers for legal
sportsbooks, online casinos, online poker sites, and adjacent
products in the U.S. market.
American Affiliate's vision blends an exclusive focus on the
U.S. opportunity with marquee brands, a powerful omni-channel
approach, a deep portfolio of proprietary technology, and a
uniquely proven management team.
Transaction Highlights:
-
Accelerates Entry into U.S. Gaming
Market: American Affiliates' Betting Hero brand is the
#1 live activation company in the U.S. sports betting and online
gambling market.
-
Revenue and EBITDA Growth:
American Affiliate has produced trailing 12 months unaudited
revenue and EBITDA of US$13.1 million and US$6.0 million
respectively.
-
High-Value Customer Base:
American Affiliate's assets have generated over 150,000 new
depositing customers for legal U.S. online betting
operators.
-
Partnerships with Tier-One
Sportsbooks: Partnerships with leading sportsbooks and
casinos including BetMGM, DraftKings, FanDuel, PointsBet, Underdog
Fantasy, WynnBet, and more.
-
Strong Alignment with Existing
Management and Shareholders: Consideration shares to
be issued at a 42% premium to market price with share restrictions
over a three-year period.
-
U.S. Pure Play: The
only at-scale affiliate company focused primarily on the U.S.
market.
-
True Omni-Channel: A
premier at-scale omni-channel affiliate in the U.S. market,
combining marquee digital brands with a best-in-class live
activation arm.
-
Leading Intellectual Property
Portfolio: Category-leading portfolio of proprietary
technology.
-
World-Class Executive Team:
Tier-one executive and management team with a history of
success and scale in the U.S. gaming market.
"The acquisition of American Affiliate represents the most
significant milestone for FansUnite to date," said Scott Burton,
CEO of FansUnite Entertainment. "This transformative transaction
will provide us further access to the lucrative U.S. regulated
sports betting and online gambling market while generating
accretive, high-margin revenue, expanding our leadership team, and
accelerating the growth of our company's footprint in the global
gambling market."
"When we looked at how quickly the U.S market is expanding,
it made clear strategic sense for us to enter the affiliate
business as a way to partner with some of the largest gambling
companies in the world," continued Scott Burton. "We will now own
and operate an unparalleled customer acquisition portfolio,
allowing us to leverage our technology, brands, and talent to
immediately capture share in the U.S. sports betting and online
gambling market."
Combined, the American Affiliate brands represent one of the
most significant single sources of new depositing customers for
legal U.S. sports betting and online gambling operators. The
leadership team has over 40 years of combined experience in the
regulated gambling industry, including senior roles at market
leaders such as ACEP, Amelco, DraftKings, Catena Media, and
GeoComply.
Brands, platforms, content, and services highlighted in the
Transaction include:
"Legal U.S. sportsbooks and online casinos are spending
billions of dollars to acquire and retain customers," said American
Affiliate CEO Chris Grove. "Our brands, team, and technology allow
us to capture a meaningful share of that marketing spend today
while producing some of the highest margins in the U.S. online
betting ecosystem."
"But that success is only a starting point," Grove continued.
"We anticipate unprecedented near-term growth as legal online
betting continues to expand into new states and new products.
Joining with FansUnite was key to our strategy of aggressively
scaling our business to meet that opportunity head-on."
Investor Call
The executive teams from FansUnite and American Affiliate
will be hosting a webinar to discuss the transaction on November
29, 2021 at 1:00PM EST.
Please click the link to register:
https://us02web.zoom.us/webinar/register/WN_79sLLGvjTmm9x8JuPs681w
A presentation outlining the transaction can be
found:
https://www.fansunite.com/press/american-affliate-acquisition
Transaction Terms
Pursuant to the terms of the Definitive Agreement, the
Company will acquire all of the issued and outstanding shares of
American Affiliate for total consideration of approximately US$58.2
million subject to a working capital adjustment (the
"Purchase
Price"). The Purchase Price is
comprised of: (i) US$13.5 million in cash paid on closing; (ii)
US$41.7 million in common shares of FansUnite, to be settled
through the issuance of common shares of the Company (the "Common
Shares''); (iii) deferred cash payments of US$3 million payable in
twenty four months. In addition to the Purchase
Price, the Definitive Agreement provides that the principals of
American Affiliate may receive earn-out consideration to be
calculated according to EBITDA targets with minimum margin
guarantees each fiscal quarter for the three year period following
closing.
For additional information on the terms of the Transaction,
please refer to a copy of the Definitive Agreement which will be
filed on SEDAR under the Company's profile within the prescribed
timeframe.
The Purchase Price satisfied through the issuance of the
Common Shares will be issued at CAD$0.75 per Common Share,
representing a premium of 42% over the FansUnite Share closing
price, and a premium of 39% over the FansUnite Share 10-day VWAP,
as at November 19, 2021, the last trading day immediately prior to
the initial announcement of the Transaction.
The Common Shares issued pursuant to the Transaction will be
subject to a contractual lock-up ranging from up to 25% of the
Common Shares released on months 4, 6, 9, 12, 15, 18, 21, 24, and
up to 3.0% releasing on month 27, 30, 33, 36, pursuant to the terms
of the Definitive Agreement.
Stifel GMP acted as financial advisor to FansUnite and DLA
Piper LLP acted as legal advisor. Stifel GMP will be paid a fee in
cash and 866,887 Common Shares for its services.
Roth Canada, ULC ("Roth") has provided a
fairness opinion in connection with the Transaction to FansUnite's
Board of Directors (the "FansUnite Board") to the effect
that, as of the date of the opinion and based upon and subject to
certain assumptions and limitations, the consideration payable by
FansUnite is fair, from a financial point of view, to FansUnite.
Roth will be paid a cash fee in exchange for its
services.
A director of the Company, Chris Grove, is a "related party"
of American Affiliate, therefore the Transaction is
a
"related party transaction" as such term is defined in
Multilateral Instrument 61-101 Protection of Minority Security Holders in
Special Transactions ("MI 61-101"). Accordingly, the Company is
relying on the exemptions from the valuation and minority
shareholder approval requirements of MI 61-101 contained in
sections 5.5(a) and 5.7(1)(a) of MI 61-101, given that neither (A)
the fair market value of the subject matter of, nor (B) the fair
market value of the consideration for, the Transaction, insofar as
it involves interested parties, exceeds 25% of the market
capitalization of the Company, as determined in accordance with MI
61-101. The Transaction has been approved by the independent
directors of the Company.
About FansUnite Entertainment
Inc.
FansUnite is a global sports and entertainment company,
focusing on technology related to regulated and lawful online
gaming and other related products. FansUnite has produced a
one-of-a-kind complete iGaming platform, with a sports and esports
focus geared for the next generation of online bettors and casino
players. The platform includes products for pre-match betting,
in-play betting, daily fantasy, content and a certified RNG to
produce casino style chance games. The platform operates multiple
B2C brands and B2B software for the online gambling industry.
FansUnite also looks to acquire technology platforms and assets
with high growth potential in new or developing markets. The
Company also provides technological solutions and services in the
global gaming and entertainment industries. Its technology includes
fixed/parimutuel odds, in-stream betting, live betting,
casino-style games, cryptocurrency wallet and news
content.
For further information, please
contact:
Prit Singh, Investor Relations at FansUnite
ir@fansunite.com
(905) 510-7636
Scott Burton, Chief Executive Officer of FansUnite
scott@fansunite.com
Darius Eghdami, President of FansUnite
darius@fansunite.com
NEITHER THE CANADIAN SECURITIES EXCHANGE NOR ITS REGULATIONS
SERVICES PROVIDERS HAVE REVIEWED OR ACCEPT RESPONSIBILITY FOR THE
ADEQUACY OR ACCURACY OF THIS RELEASE
This news release contains certain statements that may
constitute forward-looking information under
applicable securities laws. All statements, other than those of
historical fact, which address activities, events,
outcomes, results, developments, performance or achievements that
FansUnite anticipates or expects may or will occur in the future
(in whole or in part) should be considered
forward-looking information. Often, but not always, forward-looking
information can be identified by the use of words such
as "plans", "expects", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends",
"anticipates", or "believes" or variations (including
negative variations) of such words and phrases, or statements
formed in the future tense or indicating that certain
actions, events or results "may", "could", "would", "might"
or "will" (or other variations of the forgoing) be
taken, occur, be achieved, or come to pass.
Forward-looking statements in this news release include, but
are not limited to, statements with respect to the
Definitive Agreement; the Transaction; FansUnite's position with
the U.S. online sports betting market following the
completion of the Transaction; certain transaction highlights,
including American Affiliates' Betting Hero Brand's
position as the #1 live activation company in the U.S. sports
betting and iGaming market, American Affiliates'
partnerships with certain sportsbooks and casinos including
BetMGM, DraftKings, FanDuel, PointsBet, Underdog Fantasy,
WynnBet; the Transaction providing the Company access
to the U.S. regulated sports betting and online gambling
market, generate accretive, high-margin
revenue, expand the Company's leadership team and accelerate the
growth of the Company's footprint in the
global gambling market, and partner with some of the largest
gambling companies in the world;
statements made with respect to leverage the Company's
technology, brands, and talent to immediately capture
market share in the U.S. sports betting and online
gambling market; statements made with
respect to American Affiliate brands representing a significant
source of new depositing customers for legal U.S.
sports betting and online gambling operators; statements
relating to the Transaction Terms, including the Purchase
Price and cash and Common Shares payable to American
Affiliate thereto; statements relating to the Transaction being
considered as a "related party transactions" as such
term is defined in MI 61-101; information pertaining to the
advisors of the Company, including Stifel GMP, Roth
Canada, ULC and DLA Piper (Canada) LLP.
Forward-looking statements are based on assumptions and
analyses made by the Company in light of its
experience and its perception of historical trends, current
conditions and expected future developments,
including, but not limited to, expectations and assumptions
concerning: interest and foreign exchange rates;
capital efficiencies, cost saving and synergies; growth and
growth rates; the success in the online gambling and sports
betting industry; the regulatory environment applicable to online
gambling and sports betting; the technological infrastructure and
support needed to host the Company's online gambling and sports
betting platforms and applications; any cryptocurrency applications
to the Company's business; and the Company's growth plan.
While FansUnite considers these assumptions to be reasonable,
based on information currently available, they may
prove to be incorrect. Readers are cautioned not to place
undue reliance on forward-looking statements. In
addition, forward-looking statements necessarily
involve known and unknown risks, including, without
limitation, risks associated with general economic
conditions; risks associated with the Transaction; risks associated
with the Definitive Agreement; risks associated with the regulatory
environments in the jurisdictions the Company and the Target
operate in; technology-related risks that could adversely effect
the Company's ability to operate its online gambling and sports
betting platforms and applications, risks related to the novel
coronavirus (COVID-19) global pandemic and any effects it might
have on the Company's business thereto. Readers are cautioned that
the foregoing list is not exhaustive. For more
information on the risk, uncertainties and assumptions that
could cause anticipated opportunities and actual
results to differ materially, please refer to the public filings of
FansUnite which are available on SEDAR at
www.sedar.com. Readers are further cautioned not to place undue
reliance on forward-looking statements as there can be no assurance
that the plans, intentions or expectations upon which they are
placed will occur. Such information, although considered reasonable
by management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those
anticipated. Forward-looking statements contained in
this news release are expressly qualified by this cautionary
statement and reflect our expectations as of the date
hereof, and thus are subject to change thereafter. FansUnite
disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
applicable law.