- Catena Media acquires Dreamworkx for €9.5 million.
- The deal comes as Catena Media established itself as the leading affiliate site in Germany.
- The acquisition of Dreamworkx expects to generate around €600,000 in quarterly sales.
If there is one trend that unites various sectors within the technology market, it is the prevalence of high value mergers and acquisitions. Incredibly, tech companies announced $500 billion worth of such transactions in 2016 alone, representing the second-highest annual total since the year 2000.
The online gambling space is no exception to this rule, as the market's leading players continue to strengthen their positions with considerable investments. The purchase of Dreamworkx Online by Catena Media is the latest deal to impact on this niche, while this will also play a seminal role in shaping the European market in the near-term.
In this post, we'll look at the latest development and appraise its likely impact on the lucrative iGaming industry.
What are the Terms of the Acquisition?
Catena Media confirmed the deal earlier this week, purchasing Dreamworkx Online for a total of €9.5 million. An estimated €4 million of this will be paid through newly-issued shares in the Catena brand, with the remaining €5.5 million being transacted in cash.
This acquisition certainly makes sense, with Catena Media already established as the leading affiliate site in the German market and keen to fortify this position. Similarly, the assets owned by the Dreamworkx brand (including financial and sports betting sites such as Sportwettenanbieter.com, Fussballwetten.info and DeutscheFXBroker.de) add tangible value Catena Media's proposition, while helping the company to diversify its interests and revenue streams.
In total, Catena expects the assets acquired through the deal to generate around €600,000 in quarterly sales, with a bottom line operating margin in the region of 80%. That is a record for online casino so far.With spokespeople expecting the deal to be fully finalised by the end of the month, this operator will soon become an official part of Catena's thriving sport division and help the brand to reaffirm its position as a market leader.
What Does This Mean for the Catena Media and the Market as a Whole?
Make no mistake; this is a genuinely lucrative deal that will benefit Catena Media both in the near and the longer-term.
In terms of the former, there's no doubt that the acquisition has been strategically timed, particularly with the summer, 2018 World Cup likely to trigger a surge in online betting activity.
By consolidating and strengthening its status as the number one affiliate in Germany, Catena Media will benefit from increased traffic and revenues during this busy period and lay the foundations for further growth in the future.
This is where the long-term benefits will come into play too, as the brand will be able to build on the momentum created by this acquisition to achieve sustained growth and ultimately branch out into brand new markets.
The Last Word
Above all else, this deal highlights the true nature of the technology and online gambling market in 2018, with strategic acquisitions, mergers and equity sharing deals helping the leading players to strengthen their standing.
This is particularly the case in Europe, and the single market continues to establish itself as the dominant driver of growth in the industry as a whole.