Elys Game Technology, Corp. (“Elys” or the “Company”)
(Nasdaq:ELYS)(NEO|ELYS), an interactive gaming and sports betting
technology company, announced today that it has entered into a
definitive purchase agreement to acquire 100% of Bookmakers Company
US LLC, a Nevada limited liability company doing business as U.S.
Bookmaking (“USB”).
Founded in 2016, USB is a provider of sports wagering services
such as design and consulting, turn-key sports wagering solutions,
and risk management. USB’s management team includes legendary
sports book operator Victor Salerno, President, with over 40 years
of experience in the Nevada sports book business managing risk for
over 100 properties and who was inducted into the American Gaming
Association's Gaming Hall of Fame in 2015 and SBC's Hall of Fame in
2020; Bob Kocienski, CEO, with over 40 years of experience in the
gaming industry including oversight on the sports books at several
high profile casinos; Robert Walker, Director of Bookmaking, with
over 30 years of experience in managing sports books at several
casinos including the Stardust, Mirage, and the MGM; and John
Salerno, Director of Operations and Compliance with over 20 years
of experience in the sports wagering industry under the tutelage of
his father, Victor Salerno.
After the repeal of the Professional and Amateur Sports
Protection Act in 2018, USB began providing its services to the
Santa Ana Star Casino in Albuquerque, New Mexico and expanded its
New Mexico presence with service provider agreements at Isleta
Resort & Casino and Santa Claran Hotel & Casino. USB then
expanded to Colorado at the Sky Ute property followed by agreements
with the Odawa Tribe in Michigan and the 4 Bears Tribe in North
Dakota. In 2021, USB entered into a service agreement in Washington
D.C. with an expected opening for sports wagering in the latter
part of 2021. USB also entered into its first B2C agreement by
leasing a skin for interactive business in Iowa.
The deal structure provides that, subject to final closing
deliveries, which is expected by July 15, 2021 or as soon as
practicable thereafter (the “Closing Date”), Elys will acquire 100%
of USB and USB will become a wholly owned subsidiary of Elys (the
“Proposed Transaction”). Pursuant to the terms of the membership
interest purchase agreement, Elys will pay $12 million on the
Closing Date of which 50% will be payable in cash and 50% in shares
of common stock of Elys at a price equal to the volume weighted
average price of Elys stock for the 90 trading days preceding the
Closing Date, subject to shareholders approval if the number of
shares exceed 4,401,020. In addition, members of USB will have an
opportunity to receive up to an additional $38 million plus a
potential premium of 10% (or $3.8 million) (the “Earnout”) based
upon achievement of certain EBITDA milestones during the next 4
years, payable 50% in cash and 50% in stock at a price equal to the
volume weighted average price of Elys common stock for the 90
trading days prior to January 1 of each year during the Earnout
period, subject to obtaining shareholder approval described above
and a cap on the number of shares to be issued not exceeding
5,065,000. Any excess not approved by shareholders or exceeding the
cap shall be paid in cash. The annual Earnout payments are based on
the achievement of certain adjusted cumulative EBITDA milestones
that range from $(213,850) for 2021 to $19,441,483 for 2025.
“We started US Bookmaking with a vision to build a top ranked
team of experienced bookmakers in light of the looming repeal of
sports betting prohibition in the US. Since 2018, our team and
customer network have been building quickly and we are very
optimistic about the expansion and growth opportunities developing
in the U.S. sports betting market. We realized that to effectively
compete and grow with this opportunity we needed a viable
technology partner that knows the sports betting business extremely
well. Having visited the Elys trading floor in Italy, we are very
impressed with the work that the Elys team did to Americanize their
sports betting technology. We believe the timing of this
acquisition is ideal for USB since we have been vetting the
technology field for the best sports betting technology while
getting ready for the reopening of our clients as the COVID
pandemic subsides. The addition of a proprietary sports betting
platform will allow USB to customize features that our clients
desire while having full control of our cost structure” said Vic
Salerno, President and founder of USB. “We look forward to working
with the ELYS team to complete the transaction as quickly as
possible.”
“Our team at Elys has worked diligently to prepare our
leading-edge platform for the booming opportunity in the U.S.
market. Our focus has been to ensure that our future U.S. clients
are able to access a design-built solution for sports betting in
the U.S. that is locally supported with comprehensive trading, risk
management, operations and maintenance teams for frictionless
deployments. We are extremely pleased with the relationship that we
developed with the founders and highly-experienced team at USB
during our negotiations and the extensive synergies that we believe
the combined entities have. We found great commonality between the
family culture that Elys fosters in its Italian operations, as with
USB and its business operations spanning a number of states in the
U.S. We believe that our Elys Gameboard technology will give USB
the tools they need to rapidly expand their current U.S. footprint
and potentially develop operations in the evolving Canadian sports
betting market,” stated Michele Ciavarella, Executive Chairman of
Elys Game Technology. “The agreement with USB provides our
shareholders with a compelling growth opportunity through the
combination of our leading-edge betting technology and USB’s
seasoned bookmaking expertise.”
Proposed Transaction Structure:
The Proposed Transaction is structured as a membership interest
purchase agreement whereby Elys will acquire 100% of USB and USB
will become a wholly owned subsidiary of Elys. USB’s sellers will
receive on the closing date $12 million paid 50% in cash and 50% in
common shares of Elys and an Earnout of up to $41.8 million paid
50% in cash and 50% in common shares of Elys, subject to the
shareholder approval requirements and cap described above. Closing
of the Proposed Transaction is conditional on the satisfactory
completion of due diligence, and if required, the approval of
Elys’s shareholders and Nasdaq. Each of the parties Boards of
Directors have unanimously approved the membership interest
purchase agreement and the Proposed Transaction on a preliminary
basis, with consummation of the closing being subject to
satisfactory fairness opinion and satisfactory due diligence, among
other conditions. There can be no assurance given that the Proposed
Transaction will occur.
About Elys Game Technology, Corp.
Elys Game Technology, Corp., is a B2B global gaming technology
company operating in multiple countries worldwide, with B2C online
and land-based gaming operations in Italy. In Italy, Elys offers
its clients a full suite of leisure gaming products and services,
such as sports betting, e-sports, virtual sports, online casino,
poker, bingo, interactive games and slots.
The Company’s innovative wagering solution services online
operators, casinos, retail betting establishments and franchise
distribution networks. Additional information is available on our
corporate website at www.elysgame.com.
Investors may also find us on Twitter @ELYS_gaming.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements are
identified by the use of the words “could,” “believe,”
“anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,”
“predict,” “potential,” “project” and similar expressions that are
intended to identify forward-looking statements and include
statements regarding closing the Proposed Transaction by July 15,
2021 or as soon as practicable thereafter, the extensive synergies
that the combined entities have, Elys Gameboard technology giving
USB the tools they need to rapidly expand their current U.S.
footprint and develop operations. These forward-looking statements
are based on management’s expectations and assumptions as of the
date of this press release and are subject to a number of risks and
uncertainties, many of which are difficult to predict that could
cause actual results to differ materially from current expectations
and assumptions from those set forth or implied by any
forward-looking statements. Important factors that could cause
actual results to differ materially from current expectations
include, among others, the Company’s ability to close the Proposed
Transaction as planned, the Company’s ability to leverage the
synergies that the combined entities have, the Company’s ability
assist USB to rapidly expand their current U.S. footprint, the
Company’s ability to execute on its growth strategy and vision, the
duration and scope of the COVID-19 outbreak worldwide, including
the impact to state and local economies, and the risk factors
described in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2020 and its subsequent filings with the U.S.
Securities and Exchange Commission, including subsequent periodic
reports on Form 10-Q and current reports on Form 8-K. The
information in this release is provided only as of the date of this
release, and the Company undertakes no obligation to update or
revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise, after the date on
which the statements are made or to reflect the occurrence of
unanticipated events, except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20210707005452/en/
Elys Game Technology, Corp. Michele Ciavarella, Executive
Chairman Tel: 1-628-258-5148 Email: m.ciavarella@elysgame.com
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