XLM Xlmedia Plc

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014. Upon the publication of this announcement, this information is now considered to be in the public domain.

21 October 2024

XLMedia PLC

("XLMedia" or the "Company" or the "Business")

Proposed divestment of North America Business

and

Notice of General Meeting

XLMedia (AIM: XLM), a sports digital media company, is pleased to announce that it has entered into a conditional asset purchase agreement (the "APA") for the sale of certain assets that constitute the Company's North America Business (the "North America Disposal") to Sportradar AG.

Transaction Highlights

·    Conditional agreement to dispose of the North America Business for up to $30.0 million in cash:

o  $20.0 million payable on Completion; and

o  Up to an additional $10.0 million payable in April 2025, subject to performance.

·    The transaction is subject to approval by Shareholders at the General Meeting to be held on 7 November 2024 and expected to complete shortly thereafter.

·    Sportradar AG has received irrevocable undertakings from Premier Investissement SAS and the Directors representing approximately 31.18 per cent of the Ordinary Share capital to instruct a vote in favour of the Resolution.

·    Following Completion, XLMedia will become an AIM Rule 15 Cash Shell, focused solely on the orderly distribution to Shareholders of the proceeds from the North America Disposal and the previously announced sale of the Company's Europe and Canada assets ("Europe Disposal").

·    The Revenue and Estimated Adjusted EBITDA 2023 attributable to the North America Business for the year ended 31 December 2023 was $27.5 million and $5.5 million respectively.

·    The total consideration for the North America Disposal represents an implied value of up to 8.8p per Ordinary Share and a multiple of 5.5 times Adjusted EBITDA 2023 for the North America Business.

·    Total consideration for both the North America Disposal and the previously announced Europe Disposal, including all earnout payments due, would generate up to $72.5 million in cash before costs and liabilities.

The Board is committed to providing value to shareholders of XLMedia and therefore has continually sought to evaluate strategic options available to the Company. On 15 December 2023, the Board stated it was exploring the opportunity to create shareholder value through possible sale of assets and was having some early discussions with potential purchasers.

The Board is aware that the value of its individual businesses was not being fully reflected in its share price, and therefore concluded that the strategic sale of certain assets would result in delivering the most value to shareholders. Following two smaller asset disposals, on 21 March 2024 the Company announced the Europe Disposal for a total consideration up to $42.5 million.

Following the Europe Disposal, the North America Business became the sole material asset in the Group and the Board focussed on maximising the growth of this business. However, while it was confident that the US market would provide long term success for a larger orgainisation, the Board believes XLMedia's current scale on a standalone basis could impact its ability to compete in the evolving US market. In addition, the Board is also mindful that following the Europe Disposal, the continuing business of the North America Business may be considered too small to remain listed.

The Board, management and staff have worked hard to successfully integrate the three acquired entities to create the North America Business, including the development of the Media Partners Business and the strong relationships with the major US operators. However, the growth of its US revenue streams did not match the Group's original plans. Due to the obligation to fund the historical US acquisitions out of cash generated from trading, some of which occurred in a high-value market, the Group has been limited in its ability to participate in further acquisitions and has instead focused on growing the existing Owned and Operated footprint and expanding the Media Partnership Business roster of partners.

When assessing the value of the North America Business, the Board has primarily taken into account the future revenue, profitability and free cash flow of the North America Business assets as well as the value of the technology, relationships and brands to an acquiror.

The Board considers that Sportradar's offer represents a fair net present value for the stand alone North America Business's future revenue and profitability.

A circular detailing the North America Disposal, the General Meeting and actions to be taken in respect of the General Meeting will shortly be posted to Shareholders (the "Circular") which contains the Notice of the General Meeting. The Circular will also be available to view on the Company's website: www.xlmedia.com

Unless otherwise defined, capitalised terms shall have the same meaning as those in the Definitions Section contained in this announcement.

Marcus Rich, Chairman of XLMedia, commented:

"In an ongoing commitment to maximise shareholder value, following the Europe Disposal, the Board is pleased to have reached an agreement to sell the North America Business to Sportradar pending shareholder approval. We anticipate an initial distribution from the net proceeds to shareholders before year end."

For further information, please contact:

About XLMedia: 

XLMedia (AIM: XLM) is a sports digital media company that creates compelling content for highly engaged audiences and connects them to relevant advertisers.

The Group manages a portfolio of premium brands in regulated markets which are designed to reach passionate people with the right content at the right time.

Forward Looking Statements

This announcement contains forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. They are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, Shareholders should not rely on any of these forward-looking statements.

Expected Timetable of Principal Events

Notes:

1.   Each of the times and dates above are indicative only and are subject to change. If any of the above times and/or dates change, the revised times and/or dates will be notified by the Company to Shareholders by announcement through a regulatory information service.

2.   All the above times refer to London time unless otherwise stated.

* Subject to completion of all of the conditions set out in the Asset Purchase Agreement.

1.   Introduction

The Board of XLMedia PLC announces that it has entered into a conditional asset purchase agreement (the "APA") for the sale to Sportradar AG of certain assets that constitute the Company's North America Business.

The consideration for the North America Disposal is up to $30.0 million in cash for the assets to be sold free from encumbrance on Completion. Of this, $20.0 million is payable on Completion with the balance of up to a further $10.0 million payable by in April 2025 subject to performance of the North America Business. Further details on the structure of the consideration payable to the Group are set out in paragraph 5 of this announcement.

The consideration of up to $30.0 million for the North America Business represents an implied value of up to 8.8p per Ordinary Share based on the current issued share capital (based on the current exchange rate). As set out in the Results for the six months ended 30 June 2024, cash on the balance sheet at 30 June 2024 was $19.4 million which represents 5.8p of Ordinary Share (based off the exchange rate as at 30 June 2024) and primarily relates to the first payment of $20.0 million less costs of $2.0 million for the Europe Disposal. The share price of the Ordinary Shares on 20 March 2024, the day prior to the announcement of the Europe Disposal, was 6.25p.

The Revenue and Estimated Adjusted EBITDA 2023 attributable to the North America Business for the year ended 31 December 2023 was $27.5 million and $5.5 million respectively. The total consideration of $30.0 million represents a multiple of 5.5 times Adjusted EBITDA 2023 of $5.5 million for the North America Business. As set out in the Results for the six months ended 30 June 2024, the North America Business contributed unaudited revenue of $9.8 million, in line with management expectations.

On 21 March 2024, the Company announced the Europe Disposal for a total consideration of up to $42.5 million. To date, it has received $30.0 million from this transaction with a final payment of $7.5 million together with any earnout consideration (up to a maximum of $5.0 million) due to be paid on 2 April 2025. The North America Disposal, if approved, will therefore result in the divestment of substantially all of the Company's existing business, assets and trade liabilities from Completion.

Following Completion, the Company will become an AIM Rule 15 Cash Shell and does not propose to make an acquisition that constitutes a reverse takeover under AIM Rule 14 or become an investing company. However, the Board does not propose to seek cancellation of the Company's admission to trading on AIM at this point as it believes that it is in the best interests of shareholders that the Company remains admitted to trading until the final consideration payments for each of the Europe Disposal and the North American Disposal are received and a significant proportion of the consideration from the disposals has been distributed to shareholders.

As the Company does not propose to make an acquisition that constitutes a reverse takeover under AIM Rule 14 or become an investing company, Shareholders should be aware that, in accordance with AIM Rule 15, it is expected that trading in the Ordinary Shares will be suspended on or around 12 May 2025.  The Company will then have a further six months following the date of suspension before the Company's admission to trading on AIM is cancelled. The Directors' current expectation is that the Company will have taken steps to effect cancellation of its admission to trading on AIM by this time.

Upon receipt of the final deferred consideration payments for both the North America Disposal and the Europe Disposal including all earnout payments due, the disposals of the assets of the business in 2024 are expected to generate up to $72.5 million before costs and liabilities. Based on the existing issued share capital, this is equivalent to an implied gross value per share of up to 21.2p (based on the current exchange rate) compared to a closing mid-market share price of 6.6p on 15 December 2023 when the Board confirmed it was exploring the opportunity to create shareholder value through asset sales.

The Board intends to make an initial distribution to shareholders from available capital in Q4 2024, the amount of which will be determined after providing for the ongoing costs and working capital requirements of the residual runoff business and outstanding liabilities (including historical tax liabilities). Further details of this distribution from capital will be published by the Company at an appropriate time.

As the North America Disposal constitutes a fundamental change of business of the Company, this requires the approval of a majority of Shareholders voting in person or by proxy at the General Meeting.

Accordingly, Completion is conditional upon, inter alia, the passing of the Resolution by Shareholders at the General Meeting. As set out in more detail at paragraph 10 below, Sportradar AG has received irrevocable voting undertakings to vote in favour of the Resolution from certain Shareholders (including the Directors in respect of their own shareholdings in the Company) representing in aggregate approximately 31.18 per cent of the Ordinary Share capital. Further detail on the conditions to Completion are set out in the summary of the APA in paragraph 5.

A notice convening a General Meeting for 9.00 a.m. GMT on 7 November 2024 at the offices of Cavendish Capital Markets at One Bartholomew Close, London EC1A 7BL, is set out at the end of the Circular.

2.   About XLMedia

XLMedia was founded as a performance marketing business for the online gaming industry in Europe and over time it built a strong business around its sites including Freebets.com, WhichBingo.co.uk, Nettikasinot.com and Vedonlyonti.com based on a revenue share model. However, the business was dependent on search engine optimisation to promote its sites on Google searches and on 18 January 2020, the Company became aware that a number of its online affiliate casino sites had received manual actions by Google, which impacted the visibility of the sites and their ability to generate meaningful levels of online traffic, and hence revenues, from new visitors. The Group began a restructuring to reduce the number of sites and focus on raising the quality of the content on the sites to make it more relevant and engaging and, over the following years, the Group stabilised this part of the business.

As part of the restructuring the Company looked at other markets and in particular identified the nascent US sports betting market. In December 2020, the Group made its first acquisition of a US sports betting business CBWG Sports ("CBWG"). Over the next year it acquired a further two assets, Sports Betting Dime (March 2021) and Saturday Football Inc. (September 2021). As individual states began to legalise sports betting and the market began to mature, the Group worked with Operators in US sports betting market to acquire customers. In FY 2023, this division delivered revenue of $27.5 million.

Revenue and Adjusted EBITDA by vertical 2023

Background to the North America Business

Online sports betting had historically been prohibited in the United States under Professional and Amateur Sports Protection Act but following its repeal in 2018 by the Supreme Court, individual states were free to legislate to permit sports betting. As a provider of performance marketing services, it was a strategic move for XLMedia to seek to position itself to capture some of this growing market and, like many of its European rivals, it looked to make acquisitions of some of the early sports betting sites and sports focussed publishers. It was anticipated that the US sports betting market would be very significant but at the time of the Company's first acquisition in December 2020 only 12 states had regulated and launched statewide online sports betting, including New Jersey which was one of the first to legalise.

CBWG

The Company's first acquisition in December 2020 was the sports betting and gaming business, CBWG. Based in the northeast United States, it focused on professional and college sports news coverage, sports betting and online casino and was registered as a sports gaming affiliate in six states, including New Jersey and Pennsylvania. The business owned and operated sports and gaming assets including CrossingBroad.com, PASportsBooks.com, BetNewJersey.com, and EliteSportsNY.com. CBWG also had an agency arm, which partnered with leading sports media brands to drive user acquisition in the regulated betting markets outside of its key focus. This agency business grew into what was later referred to as the Media Partnership Business, providing an additional channel for the Company's content.

Sports Betting Dime

The Group's second acquisition was Sports Betting Dime in March 2021, a leading offshore affiliate sports betting brand and website with a national US presence that had over 1.2m monthly visitors (January 2021). The website provided a content rich resource for sport bettors with data and tools for novices and experts, including the latest betting odds, trends, reports, futures trackers, and analysis, and how-to betting guides. Sports Betting Dime covered the core US sports of NFL, NBA, MLB and NHL as well as MMA, golf and college football. 

Although its traffic was countrywide, the site was initially only able to monetise traffic in the nine regulated US states where XLMedia operated, but over time, Sports Betting Dime was able to operate in the widening US market as it regulated on a state-by-state basis.

Saturday Football Inc.

In September 2021, the Group made its final US acquisition with the purchase of Saturday Football Inc., a former agency partner. Saturday Football Inc. operated two leading college football media sites, saturdaydownsouth.com and saturdaytradition.com, which covered the popular Southeastern Conference and Big Ten college sports conferences. The addition of Saturday Football Inc. was intended to provide access and reach across the South and Midwest States, including markets yet to legalise sports betting as well as access the sizable US College Football marketplace, which was highly complementary to the Group's existing US sports vertical.

Current Status of the US Market and XLMedia's North America Business

The Group currently operates in 21 states with legalised online sports betting. There are 30 states that are live, legal and 20 states yet to legalise online sports betting, including California and Texas, the two most populous states. The Group does not participate in nine of these states due to limited affiliate opportunity (for example single operator monopoly (Florida) or in-person registration requirements (Nevada)). Of those states that are not yet live, legal for online sports betting, one is in active ballot discussions (Missouri) as at September 2024. In addition, the Group currently operates in four states with legalised online casino wagering. There are only seven states that are live, legal and 43 yet to legalise online casino. While only a small portion of the North America revenue is attributed to online casino, it presents an opportunity in the long-term which the Group seeks to address over time with its recently created online casino website.

The revenues from the XLMedia North America Business are from a combination of its Owned and Operated sites ("O&O") and its Media Partnership Business ("MPB"), a collective of sports media and news publishers which management judge to have high brand equity, trust and authority. O&O brands provide news, insights and betting entertainment from in-house experts that generates audience growth and retention, while Media Partners benefit from XLMedia's quality storytelling, industry expertise and operator relationships. The scale of this combination yields wider geographical coverage, increased advertiser relevance and greater revenue opportunities.

The Group's O&O portfolio of brands is targeted at high intent sports bettors and sports fans looking for rich specialist content. The brands and websites that the Company has acquired and expanded have engaged with audiences, especially in legalised states to drive affiliate revenue, across the portfolio. The principal websites include:

·    Saturday Down South and Saturday Tradition which primarily cover US college football with emphasis on the US Southeast and Midwest regions.

·    Sports Betting Dime which primarily covers the major US professional leagues across all US states.

·    Crossing Broad which primarily covers US professional and college sports in Pennsylvania with additional coverage in the US Northeast region.

The Group's MPB has allowed the Company to broaden its audience to well beyond that of its own sites, and in exchange for this audience reach, some of the revenues from the content provided by XLMedia is shared with the Media Partner. The partnership model is a core competency of XLMedia and an approach which has had repeated success. Media Partners have either a national footprint or regional footprint with some having a sports-only focus.

In the period since acquisition of its assets, a number of key states have launched online sports betting, including Arizona (September 2021), New York (January 2022), Kansas (September 2022), Ohio (January 2023), Massachusetts (March 2023) and North Carolina (March 2024). However, as the US market developed, it became clear that sports betting operators would increase their marketing spend in a state during the run up to that state's launch of online sports betting in order to build market share and that the baseline spend in already legalised states would be lower. This led to significant spikes of revenue in the run up to, and shortly after, key state launches, with operator spend normally reflecting the size and importance of the state. The market also remains strongly seasonal with the NFL season from September to February being the heaviest betting period during a year. In 2023, Americans wagered over $119.0 billion on sports betting with $40.0 billion in the last four months of the year accounting for 34% of wagers¹. For the 2024 NFL Super Bowl in February, it was estimated that 50 million Americans wagered $16.0 billion on the event².

The US market currently remains a predominantly cost per acquisition ("CPA") market with a relatively small number of operators lessening competition between them to acquire new customers. The Group has sought to develop more predictable income by seeking to shift to revenue share or hybrid models like those used predominantly in the European gaming market. These structures, while reducing the initial up front value to the Company, provide an ongoing percentage of the net revenue from the acquired customer over the life of that customer. While the US market has been slow to adopt this shift and it is not legal in all states where betting is permitted, over time it would smooth the effect of customer acquisition and seasonality.

As a result of the performance of the acquired assets since acquisition and following the 2023 annual impairment review, the Group concluded that it was necessary to write down the carrying value of North America assets by approximately $57.3 million. The new carrying value reflected the uncertainty over the timing and level of future revenues, particularly from state launches, and in particular the requirement to discount future cashflows at 25%. 

3.   Background to and Reasons for the Proposed Transaction

The Board is committed to providing value to shareholders of XLMedia and therefore has continually sought to evaluate strategic options available to the Company. On 15 December 2023, the Board stated it was exploring the opportunity to create shareholder value through the possible sale of assets and was having some early discussions with potential purchasers.

The Board is aware that the value of its individual businesses was not being fully reflected in its share price, and therefore concluded that the strategic sale of certain assets would result in delivering the most value to shareholders. Following two smaller asset disposals, on 21 March 2024 the Company announced the Europe Disposal for a total consideration up to $42.5 million.

Following the Europe Disposal, the North America Business became the sole material asset in the Group and the Board focussed on maximising the performance  of this business. However, while it was confident that the US market would provide long term success for a larger organisation, the Board believes XLMedia's current scale on a standalone basis could impact its ability to compete in the evolving US market. In addition, the Board is also mindful that following the Europe Disposal, the continuing business of the North America Business may be considered too small to remain listed.

The Board, management and staff have worked hard to successfully integrate the three acquired entities to create the North America Business, including the development of the Media Partners Business and the strong relationships with the major US operators. However, the growth of its US revenue streams did not match the Group's original plans. Due to the obligation to fund the historical US acquisitions out of cash generated from trading, some of which occurred in a high-value market, the Group has been limited in its ability to participate in further acquisitions and has instead focused on growing the existing O&O footprint and expanding the MPB roster of partners.

Value of the Proposed Transaction

The consideration for the North America Disposal is up to $30.0 million in cash. Of this, $20.0 million is payable on Completion with up to a further $10.0 million payable by the end of April 2025 subject to performance of the North America Business during the 2024 financial year.

The consideration of up to $30.0 million for the North America Business represents an implied value of up to 8.7p per Ordinary Share based on the current issued share capital and based on the current exchange rate. As set out in the Results for the six months ended 30 June 2024, cash on the balance sheet at 30 June 2024 was $19.4 million which represents 5.8p of Ordinary Share (based on the exchange rate on 30 June 2024) and primarily relates to the first payment of $20.0 million less costs of approximately $2.0 million for the Europe Disposal. The share price of the Ordinary Shares on 18 October 2024 was 9.3p.

The Revenue and Estimated Adjusted EBITDA attributable to the North America Business for the year ended 31 December 2023 was $27.5 million and $5.5 million respectively. The total consideration of $30.0 million represents a multiple of 5.5 times Adjusted EBITDA 2023 of $5.5 million for the North America Business.

When assessing the value of the North America Business, the Board has primarily taken into account the future revenue, profitability and free cash flow of the North America Business assets as well as the value of the technology, relationships and brands to an acquiror.

The Board considers that Sportradar's offer represents a fair net present value for the North America Business's future revenue and profitability.

When making its decision, the Board also took the following matters into consideration:

1.   scale required to be a standalone affiliate business operating only in the US market;

2.   assessment of other potential interest and comparator transactions; and

3.   suitability of the Group continuing as an AIM listed company following the Europe Disposal.

Summary

Based on the valuation metrics outlined and the assessment of the additional influencing considerations above, the Board believes that the North America Disposal is in the best interest of the Company and its Shareholders.

4.   Use of Proceeds

Following Completion, the Group expects to receive approximately $18.0 million of cash net of transaction-related fees in respect of the initial payment for the North America Disposal.

As previously announced, the Board intends to make an initial distribution to shareholders from available capital in Q4 2024, the amount of which will be determined after providing for the ongoing costs and working capital requirements of the residual runoff business and outstanding liabilities (including historical tax liabilities). Further details of this return of capital will be published by the Company in due course. For further information on the Company's plans following Completion, see section 7. "Description of the Group following Completion".

5.   Summary of the Main Transaction Documents

The Company entered into a conditional asset purchase agreement with the Buyer on 18 October 2024.

Pursuant to the APA, the Company is proposing to sell to the Buyer the assets that form the North America Business. The value payable for the North America Disposal is up to $30.0 million to be satisfied by the payment of $20.0 million in cash on Completion and a further payment of up to $10.0 million based on actual revenue and gross profit performance of the North America Business for the financial year ending 31 December 2024 against target for the same period.

The principal terms of the APA are as follows:

The Company together with XLMedia Publishing Limited, XLMedia US Inc. XLMedia Canada Marketing Ltd and Webpals Inc. (together the Sellers) will sell the North America Business free from legal encumbrances to the Buyer upon fulfilment on certain conditions precedent.

Conditions: the conditions precedent include that commitments made in respect of the following items remain in force at the date of completion (i) the transfer of all senior employees and not less than 90% of all non-senior employees; (ii) the transfer of certain media partner contracts, to the Buyer on the completion date; and (iii) shareholder approval in respect of the transaction having been given by the Company's shareholders in a shareholders' meeting duly convened for such purpose. The Buyer may waive these conditions (i) and (ii) at any time prior 15 December 2024 (the Long Stop Date) provided that should any of the conditions not be fulfilled by the Long Stop Date, either the Sellers or the Buyer shall have the right to terminate the APA.

Consideration: the consideration payable by the Buyer for the North America Business will be up to $30.0 million comprising an initial amount of $20.0 million payable on the completion date and a variable component of up to $10.0 million. The variable component of the consideration will be subject to adjustment and calculated by reference to the Group's revenue and gross profit in the 2024 financial year. To achieve full payout, the North America Business would need to exceed current market expectation.

Pre-Completion Obligations: the Sellers are subject to customary pre-completion undertakings whereby they agree to operate the North America Business in the ordinary course and agree to refrain from undertaking acts which may negatively impact the value and integrity of the North America Business, unless they have the prior written consent of the Buyer (not to be unreasonably withheld, conditioned or delayed).

Asset Migration: for a period from Completion until 31 January 2025 the Sellers shall use their best efforts (without being obliged to make payments to counterparties under relevant contracts to incentivise or otherwise procure or effect the novation or assignment or such contracts) to implement and carry out such tasks reasonably required to complete the migration of the North America Business to the Buyer.

Warranties and Limitations on Liability: the Sellers have provided the Buyer with a set of business warranties in relation to the North America Business and fundamental warranties (including unrestricted title to assets and capacity to enter into and implement the APA). These warranties were given at signing of the APA and will be repeated at completion of the sale. The Buyer has purchased warranty and indemnity insurance cover in respect of the warranties such that the Sellers' aggregate liability in respect of all warranty claims under the APA will be limited to $1.00 except in respect of any breach of warranty that occurs between the date the APA and the date of completion (Gap Claims). The Buyer will have recourse to the Sellers in respect of breaches of the fundamental warranties to the extent that it does not have sufficient recourse under its warranty and indemnity insurance policy.  The Sellers' maximum aggregate liability in respect of Gap Claims and breaches of fundamental warranties is limited to to the Consideration actually received by the Sellers.

Governing Law: the APA is governed by English law and disputes arising out of the APA shall be resolved by the London Court of International Arbitration.

6.   Information on the Buyer

Sportradar AG is a wholly owned subsidiary of Sportradar Group AG (NASDAQ: SRAD). Founded in 2001, Sportradar is a leading global sports technology company creating immersive experiences for sports fans and bettors. Positioned at the intersection of the sports, media and betting industries, the company provides sports federations, news media, consumer platforms and sports betting operators with a best-in-class range of solutions to help grow their business. As the trusted partner of organisations like the ATP, NBA, NHL, MLB, NASCAR, UEFA, FIFA and Bundesliga, Sportradar covers close to a million events annually across all major sports.

7.   Description of the Group Following Completion

Following Completion, XLMedia PLC (and its subsidiaries) will have sold its primary trading activities accounting for some 95% of its remaining business revenues. With effect from Completion, the Company will be classified under AIM Rule 15 as a cash shell but, as it has no plans to seek to make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14, it will have six months from Completion before the Ordinary Shares will be suspended from trading on AIM pursuant to AIM Rule 40. Shareholders should be aware that admission to trading on AIM will be cancelled six months from the date of suspension should the reason for the suspension not have been rectified.

Whilst the Group will have no material trading, the Board believes that it is in the best interests of the Shareholders for the Company to remain admitted to trading on AIM while it seeks to make returns of the consideration to Shareholders and settles relevant liabilities rather than cancelling the admission of shares trading on AIM. The Board is considering a number of options to facilitate the return of capital to Shareholders. Following completion of the return(s) of capital, the Company expects to seek Shareholder approval to cancel admission to AIM and to commence a summary winding up of the Company pursuant to Chapter 2, Part 21 of the Jersey Companies Law. Further detail on these steps will be provided to Shareholders in due course.

Expected Timetable to Cancellation of Listing on AIM

Residual Group

Post the North American Disposal, the Group will comprise the Company and various directly and indirectly owned subsidiaries incorporated in various jurisdictions. Following the North America Disposal, approximately 35 North America staff will transfer to Sportradar.

The Group is obliged to provide limited transition support services to Sportradar from completion for a period of up to three months.

The Company will remain subject to the AIM Rules during the period of post transaction and during suspension. The Group will therefore retain staff to support its residual obligations including:

transitional service arrangements, group reporting, filing and listing requirements, commencing the orderly winding-up or strike off process for the Group's subsidiaries, collecting cash from purchasers of the Group's assets, and supporting the board in making subsequent distributions. Remaining staff numbers will reduce to levels commensurate with the run off of the residual business.

The Company will continue to meet AIM reporting requirements until it has cancelled its admission to AIM.

8.   The Board

In the immediate term, the current Board will remain to oversee the handover of assets to Sportradar and oversee the Group's other activities explained in paragraph 7. "Description of Group following completion". Further announcements will follow.

9.   Current Trading and Outlook

In the Results for the six months ended 30 June 2024, following the sale of the Europe and Canada assets, continuing revenues from the North American business for the period April to August have performed ahead of the prior year.

The usual acceleration in new customer acquisition at the start of NFL season in September has been slower than anticipated. However, further acquisition budgets are expected to be released by some operators.

Accordingly, the Board remain of the view that Adjusted EBITDA for the Continuing Business (North America Business and other revenues), excluding revenue and costs of the Discontinued Business, remains broadly in line with market expectations.

10. Irrevocable Undertakings

Each of the Directors who hold Ordinary Shares in the Company has provided an irrevocable undertaking to instruct a vote in favour of the Resolution at the General Meeting to approve the North America Disposal. These irrevocable undertakings remain binding in all circumstances. Directors hold 8,388,966 Ordinary Shares representing approximately 3.19 per cent of the ordinary share capital of the Company in issue as at the Last Practicable Date.

In addition to the irrevocable undertakings given by the Directors described above, the Buyer has also received an irrevocable undertaking from Premier Investissement SAS to instruct a vote (or procure votes) in favour of the Resolution at the General Meeting in respect of 73,478,567 Ordinary Shares in total, representing approximately 27.98 per cent of the ordinary share capital of the Company in issue as at the Last Practicable Date.

The Buyer has therefore received irrevocable undertakings in respect of a total of 81,867,533 Ordinary Shares representing, in aggregate, approximately 31.18 per cent of the Company's issued share capital in issue as at the Last Practicable Date.

11. Taxation

Any person who is in any doubt as to his or her tax position or who is subject to tax in a jurisdiction other than the United Kingdom, is strongly recommended to consult with his or her professional tax adviser immediately.

12. AIM Rule 15 and General Meeting

In accordance with AIM Rule 15, the North America Disposal constitutes a fundamental change of business of the Company and is therefore conditional on Shareholder approval at a General Meeting being convened for 9.00 a.m. GMT on 7 November 2024. Accordingly, Shareholders are asked to vote at the General Meeting in favour of the Resolution to approve the North America Disposal. On Completion, the Company will have no material trading business, activities and assets other than the cash proceeds from the Europe Disposal and North America Disposal. While the Company will be treated as a "cash shell" for the purposes of AIM Rule 15, it does not propose to make an acquisition constituting a reverse takeover but will look to receive and return the proceeds from the Europe Disposal and the North America Disposal to Shareholders while remaining admitted to AIM.

A notice convening a General Meeting for 9.00 a.m. GMT on 7 November 2024 at the offices of Cavendish Capital Markets at One Bartholomew Close, London EC1A 7BL, is set out at the end of the Circular.

The Resolution is an ordinary resolution that the North America Disposal be approved. If it is not passed, Completion under the APA will not occur.

13. Importance of Shareholders' Vote

The Resolution must be passed by Shareholders at the General Meeting in order for the Proposed Transaction to proceed. If Shareholders do not approve the Resolution, the Proposed Transaction cannot be implemented, and in such circumstances, the Board will continue to operate the business in the way it has to date.

14. Recommendation

The Board considers the Proposed Transaction to be in the best interests of the Company and its Shareholders as a whole.

Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolution, as those Directors who hold Ordinary Shares have irrevocably undertaken to do in respect of their own beneficial Shareholdings.

Definitions

The following definitions apply throughout this announcement unless the context requires otherwise: