Gaming Innovation Group Inc (GiG) has announced its acquisition of KaFe Rocks, a move aimed to strengthen GiG’s position in the online casino affiliation sector.
Affiliate KaFe Rocks upholds a gaming portfolio spanning over 15 markets. Notably, the company focuses on the US market with flagship brands like Time2play.com and USCasinos.com.
The acquisition of KaFe Rocks is expected to facilitate GiG's expansion into the North American market.
GiG Media aims to leverage its proprietary media and marketing technology to drive growth for KaFe Rocks' assets. This acquisition is seen as a means to enhance profitability through cost synergies.
Specifics of the transaction indicate that KaFe Rocks is projected to generate a minimum revenue of €23m in 2024, with an EBITDA margin expected to be above 45%. The acquisition's EBITDA margin is anticipated to increase over the coming years and aims to diversify GiG Media's business.
This investment is expected to contribute to GiG Media's revenue growth, aiming for €125-135m in 2024.
Jonas Warrer, CEO of GiG, said: “After the successful integration of AskGamblers, we have been looking for the next splendid candidate to join the family. In KaFe Rocks, we've found a flourishing business led by an exceptionally skilled team. Their reputable affiliate assets will undoubtedly drive growth for the broader group. I eagerly await working closely with the KaFe Rocks team.”
The acquisition cost for KaFe Rocks is €35m, with a €15m upfront cash payment and €20m to be paid in four semi-annual instalments over 24 months.
An additional earn-out is contingent upon the achievement of specific performance targets. The transaction is structured as a Share Purchase Agreement (SPA), with GiG's subsidiary Innovation Labs Ltd. acquiring KaFe Rocks Limited (Malta).
This acquisition is the latest development in a series of notable events for GiG, including the appointment of Jonas Warrer as Acting Group CEO in September 2023 and the integration of Jooba Tech's Jackpot Management System into the GiG iGaming platform.
Additionally, GiG has reported 40% growth in revenue in the second quarter of 2023.
In February 2022, KaFe Rocks was in the process of being acquired by the Giltnor Group but the deal ended up collapsing. The Giltnor Group then secured a new CEO, Richard Brown, who was the former CEO of GiG, while KafeRocks CEO Simon Pilkington also left the affiliate.
