Acroud AB Release Q3 Update And LOI For Future Acquisition

In addition to a Letter of Intent (LOI) to purchase a sports betting company and news of the granting of three additional new licences in the American states of West Virginia, Indiana and Iowa, Igaming partner operator Acroud AB has released a Q3 trading update.

In the announcement, the company confirmed that it has chosen to accelerate the execution of its growth plan in order to respond more proactively to potential opportunities for growth and acquisition.

It added that it is currently engaged in multiple successful acquisition dialogues and favours the growth strategy embraced by the Board by its two main shareholders.

Robert Andersson, CEO, remarked: “Operationally, the company is now moving at a fast pace, with underlying KPIs pointing in the right direction at the end of Q3 – an effect of the change management during Q2 and Q3. In addition to the three licenses awarded in Q3, we also expect to be granted licenses in Pennsylvania, Illinois and Colorado in the near future, which will significantly increase our addressable market in the USA.”

Acroud went on to announce that it has signed a LOI for the acquisition of a “fast-growing lead generation company within sports betting, well positioned for emerging markets such as Latin America, Africa and Asia”.

The agreement includes a cumulative purchase consideration of approximately $1.42 million, the bulk of which will be paid in shares, and an additional consideration dependent on EBITDA growth and an EBITDA multiple corresponding to 3.5., which is contingent on 2021 goal fulfilment.

In strategic focus areas such as sports betting and emerging markets, the potential acquisition is expected to accelerate the company’s growth.

Turning to the Q3 report, with the previous sharp rise in poker and casino traffic in the period March to May now slowing to pre-COVID levels, the company cited difficult trading. A slower recovery in sports betting than expected has also hindered its success.

In Q3 2020, revenue is anticipated to be $2.83 million, 33 percent lower than in Q2 2020 and 31 percent lower than in Q3 2019. The announced EBITDA is estimated to be $1.18 million, 36 percent lower than in Q2 2020 and 49 percent  lower than in Q3 2019. For Q3 2020, the EBITDA margin is forecast to be 40 percent.

More positively, Acroud told shareholders that growth in other markets is now accelerating and that it expects to have reversed the decline in sales by around the end of Q4 2020. Further improvement steps, which will carry cost savings from Q4 2020, have been introduced in connexion with the strategy work. The improvement steps, with the aim of raising the operating margin, are continuing.

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About Joe Kizlauskas

Joe is a seasoned iGaming copywriter and speaker who has been in the business since 2015. He's written more words on all elements of iGaming than he likes to remember, and he's contributed material to a number of well-known brands. Joe may be seen playing 5 a side, at the gym or playing games on his Playstation when he is not writing.