BetMakers Technology Group: Tick from Matt Tripp & A $110m War Chest to Invest
BetMakers Technology Group
Tick from Matt Tripp & a $110m war chest to invest
BetMakers Technology Group (ASX:BET) is a B2B software services business focussed on servicing the wagering market and race operators globally. The company has received a significant endorsement from leading online wagering pioneer, Matt Tripp, who has led a $75m share placement into BetMakers and signed a three-year partnership to develop strategic and transformational opportunities for the company. Matt Tripp will take a $25m stake at $0.70/share, which was a 1.6% discount to the 15-day Volume Weighted Average Price (VWAP). Existing institutional investors have committed to invest an additional $50m at the same price with settlement due on 23 February. This will take BetMakers’ war chest to $110m and allow it to accelerate its growth opportunities. BetMakers has also secured a new three year commitment from CEO Todd Buckingham to 30 June 2024 with long term incentives in the form of 25m in performance rights designed to align vesting with a 26% CAGR in revenue and/or share price from 2022 to 2024. The CAGR in revenue is in line with our forecasts for the next three years and underpins our base case valuation of $903.6m or on current share count $1.16/share.
Business model
BetMakers operates a SaaS style model for its Racing Data and Informatics platforms: Global Betting Services and DynamicOdds. Racing bodies and bookmakers pay a monthly recurring fee for access to the platforms with contract periods usually of 3 years’ duration. BetMakers also generates revenue from the content distribution deals it has in place with international racing authorities such as US Greyhounds and US Racing and UK Greyhounds which are more aligned to share of turnover. Over time we expect the SaaS revenue share to average ~45-50% as the company expands its racing data and informatics platforms and new integrity platforms in both Australia and offshore.
Endorsement from leading online wagering pioneer
Leading online wagering pioneer, Matt Tripp, who turned Sportsbet into Australia’s second largest bookmaker behind Tabcorp before founding BetEasy, has entered into an exclusive partnership to develop BetMakers’ B2B wagering strategy. In consideration for delivering a “strategic” deal, defined as one which will increase the company’s revenues by more than 10% on a proforma basis, Mr Tripp will be issued 35m unquoted performance rights. For the delivery of a “transformational” deal, one where revenues and EBITDA are increased by more than 100% on a pro forma basis, Mr Tripp will be issued with 32m performance rights and 32m options at $0.70/option. Shareholders will be asked to vote on the arrangements at an extraordinary general meeting. Separately, Mr Tripp will subscribe for $25m in BetMakers shares as part of a $75m placement at $0.70/share.
Base case valuation is $1.16/share
Our DCF valuation is $1.16/share based on the post-capital raise share count. The company has on issue 60.6m in the money options but more than half these are conditional on delivery of a transformational deal. Performance shares on issue are also contingent on deal delivery and so we have excluded these from the per share count. With a war chest of $110m now available to it, BetMakers has the opportunity to accelerate its growth ambitions which could translate into additional upside to our forecasts.
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- BetMakers Technology Group: Tick from Matt Tripp & A $110m War Chest to Invest17 Feb 2021