Digital lottery company Jumbo Interactive announced Thursday it has completed the acquisition of UK External Lottery Manager and digital payments company StarVale Group, in a deal that was agreed upon in January 2022, for a total consideration of EUR 23 million ($22.4 million).
The transaction was completed on November 1, following the satisfaction of all closing conditions under the terms of the purchase agreement, and the receipt of regulatory approval from the Great Britain Gambling Commission in October.
Jumbo paid an initial EUR 12 million ($11.9 million) in addition to EUR 6.5 million ($6.3 million) in surplus cash funds that were also due upon completion of the acquisition.
Deferred consideration of up to EUR 4.5 million ($4.3 million) will be held in escrow and payable in the first half of 2024, subject to the achievement of certain earnings targets for the 12-month period ending June 30, 2023.
Jumbo settled 63% of the consideration from available cash reserves and 37% using existing debt facilities. The company said it remained in net cash position following the deal.
The acquisition was able to be completed after Jumbo satisfied a number of closing conditions, including regulatory approval from the UK Gambling Commission, which was secured back in October, after other approvals had been received earlier this year.
Jumbo describes itself as “Australia’s leading dedicated digital lottery company,” making lotteries easier by offering its proprietary lottery software platform and lottery management expertise to the government and charity lottery sectors both in its local market and globally, and by retailing lottery tickets in Australia and the South Pacific via ozlotteries.com. The company was founded in Brisbane in 1995 and lists on the ASX since 1999.
The company sees in purchasing StarVale the opportunity to acquire what it describes as a “leading” UK External Lottery Manager and digital payments business, which provides services to over 850,000 active lottery players across over 45 charities and not-for-profit organizations, many of these in the UK.
StarVale also comprises of DDPay, a wholly owned subsidiary and digital payments company that facilitates Direct Debit payments and provides cost-effective Direct Credit payment solutions to StarVale’s weekly lottery clients.
While Jumbo warned in July that it was unlikely that the acquisition would close before the end of the year, due to a longer-than-expected regulatory approval process, green light from the GB Gambling Commission cleared the way for the deal to complete. StarVale will form part of Jumbo’s Managed Services business segment, along with Gatherwell and Stride.