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As the business reports a solid H1 trading performance, XL Media has finalised its acquisition of BlueClaw Media with the goal of securing a UK-based basis for its planned European development.
The business has credited much of its success to its acquisitions strategy, having yesterday announced its buyout of BlueClaw for a total consideration of up to $2.5 million, after reporting a ‘solid performance’ across its casino, personal finance, and sports betting channels.
By acquiring BlueClaw, XLM hopes to implement “consistent SEO operations and digital PR best practises” across its entire portfolio, as well as give its European Sports division a footing to expand across Europe.
Fergus Clawson, the company’s owner and creator, will remain with the firm, which will operate independently as the hub for XL Media’s European operations before becoming a shared service function for the latter’s owned assets and agency partners.
Funding of takeover
XLM will fund the takeover with existing cash revenues, paying 0.6 million at completion, then another 0.6 million at the end of year one, and finally a third £0.6 million payment in the form of earnouts, subject to performance criteria.
XL detailed BlueClaw’s 2021 revenues, which stood at £1.1 million with an EBITDA of £100,000 for the 12 months ending 30 November 2021, while expecting revenues of £1.6 million and EBITDA of £400,000 for the 12 months ending 30 November 2022.
Stuart Simms, XLM Chief Executive Officer said: “We are delighted to announce the acquisition of BlueClaw, which will see us bring this hugely talented team into the XLM family.
“Having worked closely with them for over 12 months, we’ve been able to experience first-hand the quality of their work and are hugely excited at the prospect of BlueClaw’s expertise being rolled out across our broader portfolio.
“Today’s announcement further demonstrates our commitment to rebalancing the business with the correct skills, people and technologies in order to create a sustainable platform capable of delivering long-term growth.”
The company reported revenues of $32.2 million (H1 2020: $27.7 million), a gross profit of $18.3 million (H1 2020: $16.6 million), and adjusted EBITDA of $6.6 million (H1 2020: $5.1 million) in its H1 training results.
Despite these achievements, the company posted losses before taxes of $0.4 million, compared to a profit of $0.2 million in H1 2020, despite lower transformative expenses of $1 million, down from $1.5 million the previous year.
A significant increase in cash and short-term investments to $36.9 million – up from $13.9 million as of December 31, 2020 – is also likely to have impacted group costs.
“We continued to make further organisational progress in the first six months of the year, as we expanded our portfolio of high-quality branded sites, whilst also laying the foundations to improve the use of our first party data,” Simms remarked.
“The combined positive impact resulted in a strengthened US Sports division, increase of regulated market and new money revenue, as well as the development of a significantly improved data architecture and infrastructure to serve the group’s long-term ambitions.”
Onward and upward XLM proposes to establish a data utilisation platform in the fourth quarter of 2021, with an end date of December 2022, while simultaneously implementing a distributed shared services model in stages with the goal of boosting functional expertise and operational efficiencies.
XLM’s core commercial objectives for the remainder of 2021 and into 2022, according to Simms, include developing a data, technology, and operating platform to power its brand portfolio across all verticals, as well as improving customer experience and advertiser performance.
He concluded: “To achieve this ambition, during 2021, I have challenged the business to accelerate the acquisition of new assets, reorganise and re-build our capability and to develop a new data and technology platform.
“I am proud of the team and our achievements, and have confidence that the necessary changes will result in improved focus, productivity and growth in H2 2022 and beyond.”