Two days ago, Vancouver-based FansUnite Entertainment Inc. reported that on May 1, it entered into a definitive purchase agreement to officially sell to an arm’s length third-party all of the shares in its entirely owned subsidiary, McBookie Ltd., a Scottish private limited firm.

Reasons for selling:

FansUnite purchased McBookie in March 2020 for a total of CDN$2.2 million, involving CDN$1 million in cash. Three years later, the company will see the sale of McBookie for more than CDN$5 million in cash netting them a significant profit, more than 7 times their record EBITDA2 in 2022.

However, McBookie, the UK’s leading Scottish-focused sportsbook and online casino, has achieved three consecutive years of profit growth. In addition, under FansUnite’s ownership, it saw a 451% increase in gross profit and a 305% increase in traffic. Driven by the strategic leadership of CEOs Paul Petrie and Damian Walker, McBookie has experienced an increase in new players, retention and brand recognition.

Commenting on the sale, Scott Burton, CEO of FansUnite, said: “This is a great deal and outcome for McBookie and for FansUnite. We began a path of streamlining and focusing our business in 2022. With the UK continuing to tighten regulations on gaming operations, we felt it was time for FansUnite to exit the B2C space. We will be able to focus more resources on the segments of our business that offer the highest growth potential with good margins, specifically the U.S. marketplace and affiliate opportunities. This sale will strengthen FansUnite’s balance sheet as the company moves towards being cash flow positive. I want to thank Paul and Damian for their efforts while they were part of FansUnite and wish them well as they continue to grow the McBookie brand.”

Under the terms of the agreement, Petrie and Walker will continue in their roles as directors at McBookie.

Important branch:

Via McBookie, FansUnite possessed a remote gambling software license and a remote wagering license from the UK Gambling Commission allowing the company to operate as a Business-to-Consumer (“B2C”) operator and a Business-to-Business (“B2B”) technology supplier to the UK online gambling market.

Terms of the agreement:

Under the terms of the definitive agreement, the company formally sold all of the issued and outstanding shares of McBookie to an arm’s length private party for a total cost of US$4,016,544, adjusted for working capital.

A purchase is a simultaneous sign and closing with the purchase price payable at closing.

In addition, Tekkorp Capital Advisors has taken on the role of strategic advisor to the company.

KWP LLP took on the role of legal counsel to the Buyer and DLA Piper (Canada) LLP took on the role as legal counsel to the company.