Better Collective boosts US presence with RotoGrinders deal
Stockholm-listed Better Collective will significantly expand its presence in the US market through the acquisition of daily fantasy and sports betting affiliate Rical LLC, operator of the RotoGrinders and SportsHandle portals.
Founded in 2009, and headquartered in Nashville, Tennessee, RotoGrinders operates a network of sites including PennBets, USBets and poker site PocketFives.com. It generated revenue of more than $8m (£6.3m/€7.2m) in 2018, and earnings of over $3m.
While the business was originally focused on the daily fantasy market, it has expanded into sports betting and online gambling.
“Since PASPA was repealed by the US Supreme Court last year, we have carefully evaluated how best to establish Better Collective in the growing US market,” Better Collective chief executive Jesper Søgaard explained.
“We have assessed various acquisition opportunities, searching for access to strong products and dedicated people with insight into this market,” he continued. “We strongly believe that we found exactly that in RotoGrinders, where we see a strong and dedicated management team and talented employees.”
Better Collective will pay $21m for an initial 60% stake in the business, comprising $17.85m in cash and $3.15m in shares. There is an agreement in place to acquire the remaining 40% of shares between 2022 and 2024.
The valuation of this stake, held by the company’s three founders, will be based on an EBITDA multiple of between 5x and 10x, determined by the profitability RotoGrinders, with additional conditions relating to the performance of Better Collective’s wider US business.