Las Vegas, NV -- Jan. 12, 2023 -- InvestorsHub NewsWire
-- Golden Matrix Group, Inc. (NASDAQ:
GMGI)(“GMGI” or “Golden Matrix”), developer, licensor
and global operator of online gaming and eCommerce platforms,
systems, and gaming content, and MeridianBet Group, Southeast
Europe’s leading business-to-consumer (B2C) sports betting and
gaming group with headquarters in Malta, operating in multiple
markets across Europe, Africa, and Latin America, today announced
that GMGI has entered into a definitive acquisition agreement
pursuant to which it has agreed to acquire MeridianBet Group and
its related companies in a cash and stock transaction valued at
approximately $300 million (the “Acquisition”).
The acquisition, when completed, will provide GMGI access to new
and fast growing regulated B2C markets that have experienced double
digit compound annual growth rates (CAGRs) since 2020,
supported by a network of over 1,100 highly skilled MerdianBet
professionals. The acquisition is expected to close in the first
half of 2023, subject to customary conditions to closing, including
GMGI raising required funding, completion of due diligence, GMGI
shareholder approval, and regulatory approvals. The combined pro
forma revenues of both companies are expected to be greater than
$100 million in FY2022, with an EBITDA estimated to be greater than
$22 million for the pro forma year ended 31 October, 2022, making
the combination financially appealing and
earnings-accretive.
Both companies plan to continue operating under their respective
brands.
Transaction Highlights
- Creation of a combined group of
profitable and cash positive companies, with enhanced buying
power.
- Access to new markets
globally.
- Increased competitive edge
supporting over 600 third party casino brands on combined
proprietary platforms and over 3.5 million registered retail
customers in the B2C facing businesses.
- Following the acquisition, GMGI
expects to be positioned for growth, both organically and through
further acquisitions, and through supported proprietary technology
solutions across retail and online.
- Following the acquisition, GMGI
expects that synergetic growth opportunities will exist in core
markets through the strong MeridianBet brand and growth prospects
of other GMGI B2C brands and market entries.
Rationale for the Planned Acquisition
MeridianBet Group with a strong B2C presence in European, Latin
America (LATAM), and African sports betting markets - and over 38%
year-on-year revenue growth, Fiscal Year 2022 over 2021 - combined
with Golden Matrix’s B2B gaming platforms supporting over 6.8
million registered users is expected to result in complementary
aspects of the business and a significant increase in market share
for both companies.
As a Nasdaq company, Golden Matrix has been seeking
opportunities to grow and expand in a strategic and sustainable
way. The acquisition of MeridianBet presents a unique opportunity
for GMGI to achieve this growth while also gaining access to new
markets and resources. Additionally, MeridianBet is a profitable
and unique company, which is expected to bring valuable expertise
and assets to the combined entity. Overall, the acquisition of
MeridianBet is anticipated to bring significant benefits to GMGI
from both a financial and operational standpoint, and GMGI’s
management team is confident it will drive long-term value for
shareholders.
Brian Goodman, CEO of Golden Matrix:
"We are thrilled to announce our entry into a purchase
agreement with the shareholders of MeridianBet Group. We believe
that this acquisition will provide us entry into a well-established
and highly scalable B2C vertical in new markets outside of our core
markets. MeridianBet Group appealed to us with its proven business
model that emphasizes organic growth, resilience to external
economic factors, and exceptional products and technology. We are
pleased to be on the path to completing this acquisition and look
forward to strengthening and growing our position in the global
online betting and gaming industry, expanding into new regulated
markets, and maintaining our ongoing drive to scale the business as
a whole at a rapid growth rate. MeridianBet Group’s regional market
strength, brand awareness and proprietary technology solutions
across the enlarged group are also expected to further accelerate
our growth and expansion into new territories.”
Commenting on the Acquisition, Zoran Milosevic, Chief
Executive Officer of MeridianBet Group said:
“Today marks a major milestone for MeridianBet Group and its
employees. As a public company traded on Nasdaq, in synergy with
Golden Matrix, we expect to set an industry standard when it comes
to worldwide gaming platforms and to be in an even stronger
position to deliver on our aggressive growth strategy and expand
into new markets, including Brazil and the US. Our brands,
which are well known among worldwide online betting and gaming
communities, are stronger together; and I am looking forward to
working closely with Brian Goodman as we conclude the acquisition.
I would like to take this opportunity to express my gratitude to
Brian for his hard work and determination, in what has been a
testing global macro economic environment for all. I thank the
entire GMGI and MeridianBet team for their dedication and
commitment to finalize this agreement. We are excited about the
many opportunities we can pursue together in the years ahead, and
we look forward to updating shareholders and employees on our
progress and working towards closing the acquisition and continuing
as a combined group.”
Terms of the Acquisition
The purchase price payable to MeridianBet Group shareholders
will be satisfied by the issuance to MeridianBet stockholders of
approximately 65.3 million common shares of GMGI, based on an
agreed price of $3.50 per share, and $70 million in cash. Upon
closing of the acquisition, the MeridianBet Group of companies will
become wholly-owned subsidiaries of GMGI. The acquisition agreement
has been approved by the Board of Directors of each company.
“From the perspective of MeridianBet Group,” added Mr.
Milosevic, “the strategic rationale behind the deal and becoming
part of a Nasdaq-listed company is to be more competitive and
successful in Brazil, the United States and other large markets –
where market entry for private companies is more challenging. We
are confident the best days of sports betting and online casinos
are yet to come, with gaming regulation rolling out globally,
creating opportunities for us to expand into these emerging
markets.”
No change in the Company’s name is planned in connection with
the acquisition, and the Board structure is expected to remain the
same, with the sole exception being Mr. William Scott joining as
Chairman of the Board. Mr Scott is a seasoned veteran in the
regulated gaming industry and is currently an advisor to
MeridianBet Group.
For additional information on the sale and purchase agreement,
please refer to Golden Matrix’s Current Report on Form 8-K, which
has been filed today with the Securities and Exchange Commission
and is available at www.sec.gov
Further information about MeridianBet Group can be found
at: https://ir.meridianbet.com.
The Loev Law Firm and Howard & Howard represented GMGI
and the MeridianBet Group shareholders, respectively, in this
Acquisition.
About MeridianBet Group
Founded in 2001, the MeridianBet Group is a well-established
online sports betting and gaming group, licensed and currently
operating in more than 15 jurisdictions across Europe, Africa and
South America. The MeridianBet Group’s successful business model
utilizes proprietary technology and scalable systems, thus allowing
it to operate in multiple countries and currencies and with an
omni-channel approach to markets, including retail, desktop online
and mobile. For more information, visit https://ir.meridianbet.com.
About Golden Matrix
Golden Matrix, based in Las Vegas NV, is an established B2B and
B2C company across multiple international markets. The B2B division
of Golden Matrix develops and licenses proprietary gaming platforms
for its extensive list of clients and its B2C division operates a
high-volume eCommerce site enabling end users to enter paid-for
competitions on its proprietary platform in authorized markets.
Further information on Golden Matrix can be found
at www.goldenmatrix.com.
Twitter - https://twitter.com/GMGI_Official
Instagram - https://www.instagram.com/goldenmatrixgroup/
FORWARD-LOOKING STATEMENTS
Certain statements made in this press release contain
forward-looking information within the meaning of applicable
securities laws, including within the meaning of the Private
Securities Litigation Reform Act of 1995 (“forward-looking
statements”). Words such as “strategy,” “expects,” “continues,”
“plans,” “anticipates,” “believes,” “would,” “will,” “estimates,”
“intends,” “projects,” “goals,” “targets” and other words of
similar meaning are intended to identify forward-looking statements
but are not the exclusive means of identifying these
statements.
Important factors that may cause actual results and outcomes to
differ materially from those contained in such forward-looking
statements include, without limitation, the ability of the parties
to close the Purchase Agreement on the terms set forth in, and
pursuant to the required timing set forth in, the Purchase
Agreement, if at all; the occurrence of any event, change or other
circumstances that could give rise to the right of one or all of
the shareholders of MeridianBet Group or GMGI (collectively, the
“Purchase Agreement Parties”) to terminate the Purchase Agreement;
the effect of such termination, including breakup and other fees
potentially payable in connection therewith; the outcome of any
legal proceedings that may be instituted against Purchase Agreement
Parties or their respective directors or officers; the ability to
obtain regulatory and other approvals and meet other closing
conditions to the Purchase Agreement on a timely basis or at all,
including the risk that regulatory and other approvals required for
the Purchase Agreement are not obtained on a timely basis or at
all, or are obtained subject to conditions that are not anticipated
or the expected benefits of the transaction; the ability of GMGI to
obtain the funding required to complete such acquisition, the terms
of such funding, potential dilution caused thereby and/or covenants
agreed to in connection therewith; the ability to obtain approval
by GMGI’s shareholders on the expected schedule of the transactions
contemplated by the Purchase Agreement; potential adverse reactions
or changes to business relationships resulting from the
announcement or completion of the Purchase Agreement; the ability
of GMGI to retain and hire key personnel; the diversion of
management’s attention from ongoing business operations; the
expected synergistic relationships and cost savings from the
transactions contemplated by the Purchase Agreement; uncertainty as
to the long-term value of the common stock of GMGI following the
closing of the Purchase Agreement; the business, economic and
political conditions in the markets in which Purchase Agreement
Parties operate; the impact of the COVID-19 pandemic on GMGI; the
effect on GMGI and its operations of the ongoing Ukraine/Russia
conflict, increased interest rates, recessions and increased
inflation; the need for additional financing, the terms of such
financing and the availability of such financing; the ability of
GMGI and/or its subsidiaries to obtain additional gaming licenses;
the ability of GMGI to manage growth; GMGI’s ability to complete
acquisitions and the available funding for such acquisitions;
disruptions caused by acquisitions; dilution caused by fund
raising, the conversion of outstanding preferred stock and/or
acquisitions; GMGI’s ability to maintain the listing of its common
stock on the Nasdaq Capital Market; GMGI’s expectations for future
growth, revenues, and profitability; GMGI’s expectations regarding
future plans and timing thereof; GMGI’s reliance on its management;
the fact that GMGI’s chief executive officer has voting control
over GMGI; related party relationships; the potential effect of
economic downturns, recessions, increases in interest rates and
inflation, and market conditions, decreases in discretionary
spending and therefore demand for our products, and increases in
the cost of capital, related thereto, among other affects thereof,
on GMGI’s operations and prospects; GMGI's ability to protect
proprietary information; the ability of GMGI to compete in its
market; GMGI’s lack of effective internal controls; dilution caused
by efforts to obtain additional financing; the effect of current
and future regulation, GMGI’s ability to comply with regulations
and potential penalties in the event it fails to comply with such
regulations and changes in the enforcement and interpretation of
existing laws and regulations and the adoption of new laws and
regulations that may unfavorably impact our business; the risks
associated with gaming fraud, user cheating and cyber-attacks;
risks associated with systems failures and failures of technology
and infrastructure on which GMGI's programs rely; foreign exchange
and currency risks; the outcome of contingencies, including legal
proceedings in the normal course of business; the ability to
compete against existing and new competitors; the ability to manage
expenses associated with sales and marketing and necessary general
and administrative and technology investments; and general consumer
sentiment and economic conditions that may affect levels of
discretionary customer purchases of GMGI's products, including
potential recessions and global economic slowdowns. Although we
believe that our plans, intentions and expectations reflected in or
suggested by the forward-looking statements we make in this release
are reasonable, we provide no assurance that these plans,
intentions or expectations will be achieved.
Other important factors that may cause actual results and
outcomes to differ materially from those contained in the
forward-looking statements included in this communication are
described in GMGI’s publicly filed reports, including, but not
limited to, under the "Special Note Regarding Forward-Looking
Statements," "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" sections
of GMGI’s periodic and current filings with the SEC, including the
Form 10-Qs and Form 10-Ks, including, but not limited to, GMGI’s
Transition Report on Form 10-K for the nine month transition period
ended October 31, 2021 and GMGI’s Quarterly Report on Form 10-Q for
the quarter ended July 31, 2022. These reports are available
at www.sec.gov.
The Company cautions that the foregoing list of important
factors is not complete, and does not undertake to update any
forward-looking statements except as required by applicable law.
All subsequent written and oral forward-looking statements
attributable to GMGI or any person acting on behalf of any Purchase
Agreement Parties are expressly qualified in their entirety by the
cautionary statements referenced above. Other unknown or
unpredictable factors also could have material adverse effects on
GMGI’s future results. The forward-looking statements included in
this press release are made only as of the date hereof. GMGI cannot
guarantee future results, levels of activity, performance or
achievements. Accordingly, you should not place undue reliance on
these forward-looking statements. Finally, GMGI undertakes no
obligation to update these statements after the date of this
release, except as required by law, and takes no obligation to
update or correct information prepared by third parties that is not
paid for by GMGI. If we update one or more forward-looking
statements, no inference should be drawn that we will make
additional updates with respect to those or other forward-looking
statements.
Additional Information and Where to Find It
This communication does not constitute a solicitation of any
vote, proxy or approval in connection with the Purchase Agreement
or related transactions. In connection with the transactions
contemplated by the Purchase Agreement, GMGI plans to file with the
Securities and Exchange Commission (SEC) a proxy statement to seek
shareholder approval for the Purchase Agreement and the issuance of
shares of common stock in connection therewith, which, when
finalized, will be sent to the shareholders of GMGI seeking their
approval of the respective transaction-related proposals, as well
as other documents regarding the proposed transactions. This
communication is not a substitute for any proxy statement or other
document GMGI may file with the SEC in connection with the proposed
transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
PROXY STATEMENT, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED
WITH THE SEC IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY
THE PURCHASE AGREEMENT, WHEN THEY BECOME AVAILABLE, BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT GMGI AND THE PURCHASE
AGREEMENT AND THE PROPOSED PURCHASE TRANSACTION.
Investors and security holders may obtain copies of these
documents free of charge through the website maintained by the SEC
at www.sec.gov or from GMGI at
its website, https://goldenmatrix.com/investors-overview/. Documents
filed with the SEC by GMGI will be available free of charge on the
“Investors,” “SEC Filings” page of our website at https://goldenmatrix.com/investors-overview/sec-filings/ or,
alternatively, by directing a request by mail, email or telephone
to GMGI at 3651 Lindell Road, Suite D131, Las Vegas, NV
89103; ir@goldenmatrix.com, or (702) 318-7548,
respectively.
Participants in the Solicitation
The Company and certain of its respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the respective shareholders of GMGI in
respect of the transactions contemplated by the Purchase Agreement
under the rules of the SEC. Information about GMGI’s directors and
executive officers and their ownership of GMGI is available in
GMGI’s Definitive
Information Statement on Schedule 14C, as filed with the
Securities and Exchange Commission on May 18, 2022 and the Current
Report on Form 8-K filed with the SEC on December 7, 2022.
The sellers, MeridianBet Group, and their respective directors,
managers, and executive officers may also be deemed to be
participants in the solicitation of proxies from GMGI’s
shareholders in connection with the Purchase Agreement. A list of
the names of such parties and information regarding their interests
in the Purchase Agreement will be included in the proxy statement
for the Purchase Agreement when available.
Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be contained in
the proxy statement and other relevant materials to be filed with
the SEC regarding the Purchase Agreement when they become
available. Investors should read the proxy statement carefully when
it becomes available before making any voting or investment
decisions. You may obtain free copies of these documents from GMGI
using the sources indicated above.
No Offer or Solicitation
This communication is for informational purposes only and is not
intended to and shall not constitute a proxy statement or the
solicitation of a proxy, consent or authorization with respect to
any securities or in respect of the Purchase Agreement and is not
intended to and shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy or subscribe for any securities or a solicitation of any vote
of approval, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such jurisdiction.
Projections
The financial projections (the “Projections”) included herein
were prepared by GMGI in good faith using assumptions believed to
be reasonable. A significant number of assumptions about the
operations of the business of GMGI were based, in part, on
economic, competitive, and general business conditions prevailing
at the time the Projections were developed. Any future changes in
these conditions, may materially impact the ability of GMGI to
achieve the financial results set forth in the Projections. The
Projections are based on numerous assumptions, including
realization of the operating strategy of GMGI; industry
performance; no material adverse changes in applicable legislation
or regulations, or the administration thereof, or generally
accepted accounting principles; general business and economic
conditions; competition; retention of key management and other key
employees; absence of material contingent or unliquidated
litigation, indemnity, or other claims; and other matters, many of
which will be beyond the control of GMGI, and some or all of which
may not materialize.
Additionally, to the extent that the assumptions inherent in the
Projections are based upon future business decisions and
objectives, they are subject to change. Although the Projections
are presented with numerical specificity and are based on
reasonable expectations developed by GMGI’s management, the
assumptions and estimates underlying the Projections are subject to
significant business, economic, and competitive uncertainties and
contingencies, many of which will be beyond the control of GMGI.
Accordingly, the Projections are only estimates and are necessarily
speculative in nature. It is expected that some or all of the
assumptions in the Projections will not be realized and that actual
results will vary from the Projections. Such variations may be
material and may increase over time. In light of the foregoing,
readers are cautioned not to place undue reliance on the
Projections. The projected financial information contained herein
should not be regarded as a representation or warranty by GMGI, its
management, advisors, or any other person that the Projections can
or will be achieved. GMGI cautions that the Projections are
speculative in nature and based upon subjective decisions and
assumptions. As a result, the Projections should not be relied on
as necessarily predictive of actual future events.
The Projections include certain measures not prepared in
accordance with generally accepted accounting principles in the
United States (GAAP). Specifically, the Projections include an
estimate of combined company EBITDA, which is defined as net income
before interest, taxes, depreciation and amortization. Such
Non-GAAP financial measure has not been reconciled to the
comparable GAAP financial measure because the reconciliation could
not be performed without unreasonable efforts. Specifically, the
GAAP measures are not accessible on a forward-looking basis because
we are currently unable to predict with a reasonable degree of
certainty the type and extent of certain items that would be
expected to impact the GAAP measures for the combined company. The
unavailable information could have a significant impact on our GAAP
financial results.
https://www.grandviewresearch.com/industry-analysis/online-gambling-market
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