Following the announcement that Nektan has acquired full control of its subsidiary Nektan Marketing Services from Betfred Founder Fred Done and ActiveWin Managing Director Warren Jacobs, GI spoke to Jacobs about the subsidiary’s creation, and why now was the right time to hand control to Nektan.
What prompted the creation of Nektan Marketing Services?
Fred and I are business partners and in several companies - Fred loves creating businesses and building them up. We were looking for a home for Kerching.com, because a group of us had acquired that brand from IGT, and we needed to find a new platform for it. We met Matt Sunderland, who was COO of Nektan at the time, and we were able to very quickly move the brand on to that platform.
We had a moment of shared thought, and he said: “Wait a minute, are you guys exclusive to Betfred?” I said no. I asked, “Do you guys do marketing?” and Matt said no. So, we thought let’s build a model with a joint venture where Fred and I would partner with Nektan, to combine their online gaming technology and specialisation in mobile, and our expertise in digital acquisition, CRM and customer support.
The idea was to create Nektan Marketing Services where Fred and I were 50% shareholders, and Nektan were also shareholders. They were providing the white labels on the network together with their own brand, and we were providing the know-how and expertise. Nektan Marketing Services started to do acquisitions for some of the core brands such as Sapphire Lounge, and we started to do CRM and build a CRM team for the white labels and their own brands.
Why was now the right time to sell your stake to Nektan?
Nektan, like many other successful businesses, wanted to have everything in-house. In order to raise more funds they wanted to bring this under their control, and to have the greater oversight and business growth potential that brings with it.
We agreed a value of about £1.2m, because they were buying other shares for £500,000, but they were also going to take on services from ActiveWin for the next 12 months. We felt that for the investment we had put in, and what we would go on to develop, it was actually fine by us that they wanted to leverage what they had built with us.
Do you think this a model that you might be able to use for other platform or gaming providers?
We are not reinventing the wheel. You’ve got Dragonfish and you’ve also got Playtech Turnkey Solutions, which is known as PTS. I worked for Europartners and it was acquired by Playtech and PTS – that was a €280m deal. So I’ve not reinvented the wheel, I’ve taken something that Playtech has done and done very well, of which I was privileged to be a part, and I’ve replicated that on a far smaller and more modest scale.
So the sale was perfectly amicable as business decisions go?
It’s not only amicable, we’re continuing to work together for at least the next 12 months, and we’re all very pleased as to how it’s happened. We’re particularly proud that we built and sold this business in just two years, and for us this demonstrates that we can execute this type of operation to great effect, and not just provide services for Betfred.