REG - B90 Holdings PLC - Acquisition of Emwys; Licence Agreement; CLN issue

B90 HoldingsAnnouncement

12/07/2023 07:00

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RNS Number : 7063F  B90 Holdings PLC  12 July 2023

FOR RELEASE: 07.00, 12 July 2023

B90 Holdings plc

("B90" or the "Company")

Acquisition of Emwys and Related Licence Agreement

Further CLN issue

B90 Holdings plc (AIM: B90), the online marketing and operating company for
the gaming industry, is pleased to announce that it has entered into a share
purchase agreement with Funko International AB ("Funko") to acquire the entire
share capital of Emwys AB ("Emwys"), a Swedish marketing company that
specialises in pay-per-click (PPC) marketing in the online gambling sector
(the "Acquisition"). In conjunction with the Acquisition, B90 and Funko have
also entered into a short term associated licence and marketing agreement with
regard to Funko's Google advertising account used by Emwys for PPC marketing
(the "Google PPC Account"), currently conducted in the Finnish market (the
"Licence Agreement" and, together with the Acquisition, the "Transaction").

The Transaction will provide B90 with a significant asset to enhance its
marketing capabilities and generate future revenue through strategic affiliate
partnerships. The expected closing date for the Acquisition is no later than 1
September 2023 (the "Closing Date").

Emwys and the Acquisition

The total consideration payable by B90 under the Acquisition is, in aggregate,
up to €3.6 million for Emwys' entire share capital on a cash free and debt
free basis. The initial consideration payable is an immediate payment of
€500,000 in cash and €250,000 in the form of convertible loan notes (the
"CLNs"), both of which are non-refundable. The balance consideration is
payable on the Closing Date, subject to certain performance conditions being
achieved, and consists of €1.25 million in cash and €1.6 million either in
the form of CLNs or the issue of new ordinary shares in the Company at the
closing mid-price on the business day prior to the Closing Date (with any such
shares subject to a 3-month lock-in period), at the election of the Company.
The cash element of the initial and balance consideration is intended to be
funded from the proceeds of the Subscription announced to market on 30 June
2023, with the final instalment of the €2 million to be received shortly,
following which the CLNs will be issued and the market updated. Alternatively,
the Company can elect to settle the entire balance consideration for €2.25
million in cash at the Closing Date, subject to available cash balances. The
assets being acquired are expected to be positive cash flow generating in Q4
2023.

 

The CLNs have a term of three years from issue and are convertible no earlier
than 31 December 2023, at the request of the CLN holder, at a 10% discount to
the volume weighted average price for the five trading days prior to the
conversion notice. The CLNs are convertible, at the discretion of the Company,
at any time and on the same terms. The CLNs carry a coupon of 10% per annum,
which shall accrue and be paid in cash or shares at the Company's election,
upon redemption or conversion.

To date, Emwys has been focused on marketing online gambling services in
Finland, and B90 plans to expand into new territories using the knowledge and
assets acquired in order to drive traffic and boost revenues for its existing
and new affiliate accounts. By utilising Emwys' expertise, B90 aims to
maximise its reach and capitalise on the growing demand for online gambling
marketing services. The Acquisition includes Emwys' valuable marketing tools,
business contracts, domains, and other necessary administrative rights.

For the year ended 31 December 2022, Emwys' unaudited profit was approximately
€0.06 million and as at 31 December 2022, had net assets of approximately
€0.07 million.

As part of this transaction, Emwys AB is transferring sought after knowledge
and experience in the field of PPC marketing. PPC, or pay-per-click marketing,
is a method of paid advertising which enables a website to rank higher and
appear among the top search results in Google. It allows companies to bid on
keywords to target specific audiences, yielding focused and more significant
responses.

 

Licence Agreement

The Licence Agreement grants B90 an exclusive licence for the use of the
Google PPC Account and seeks to regulate the cooperation in generating and
sharing revenues.

During July and August 2023, the revenues generated from revenue sharing
agreements shall be accrued with Funko receiving 75% and B90 receiving 25% on
all marketing activities undertaken using the Google PPC Account. In addition,
B90 shall receive 100% of the marketing revenue payable per qualified
depositing customer (CPA revenue) at a third party marketing partner as a
result of operating the Google PPC Account, up to the equivalent amount B90
has invested in the month prior, and any such revenue exceeding that amount
will be shared equally between Funko and B90. It is intended that the Google
PPC Account will be transferred to B90 or Emwys following the Closing Date and
B90 will then receive 100% of revenues generated by Emwys making use of the
Google PPC Account; alternatively, the Company may enter into a new perpetual
licensing agreement with Funko.

During July and August 2023, B90 has undertaken to invest not less than
€250,000 per month in the Google PPC Account, pro rated as necessary, such
amount to be recovered before any revenue share referred to above.

If closing of the Acquisition has not occurred by 1 September 2023, the
Licence Agreement shall be automatically terminated with immediate effect and
no further consideration will be payable by B90.

Further CLN issue

The Company has also raised a further £300,000 through a subscription for
CLNs by an existing investor in the Company.

The CLNs have a term of three years from issue and are convertible no earlier
than 1 January 2024, at the request of the CLN holder, at a 10% discount to
the volume weighted average price for the five trading days prior to the
conversion notice.  The CLNs are convertible, at the discretion of the
Company, at any time and on the same terms.  The CLNs carry a coupon of 10%
per annum, which shall accrue and be paid upon redemption or conversion.

 

Commenting on the Acquisition, Ronny Breivik, Executive Chairman of B90, said:

"The acquisition of Emwys presents substantial opportunities for B90.  It is
a step change for our business both in terms of scale and operations.  By
acquiring new knowledge and investing in this proven marketing concept, we aim
to drive strong revenue growth whilst continuing to generate profits from our
existing marketing operations."

"This is an important first step in our 'buy and build' M&A strategy.  We
will seek to scale our business rapidly by following a strategic and
deliberate approach to actively pursue selective acquisitions and other
opportunities, such as entering license agreements with businesses in our
sector which seek operational knowhow and distribution capabilities."

The information communicated in this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended.

-ends-

For further information please contact:

 B90 Holdings plc                              +44 (0)1624 605 764
 Ronny Breivik, Executive Chairman

 Strand Hanson Limited (Nominated Adviser)     +44 (0)20 7409 3494
 James Harris / Richard Johnson / Rob Patrick

 Zeus Capital Limited (Joint Broker)           +44 (0)20 3829 5000
 Louisa Waddell / Tim Dainton

 Panmure Gordon (UK) Limited (Joint Broker)    +44 (0)20 7886 2500
 Simon J French

 Belvedere (Financial PR & IR)                 +44 (0)20 3008 6864
 John West / Llewellyn Angus

 

About B90 Holdings plc

B90 Holdings plc is a leading company in the online gambling industry, focused
on the operation of its own online Sportsbook and Casino product as well as
marketing activities for other online gaming companies.  We specialise in
providing innovative gaming experiences and state-of-the-art technology
solutions. With a strong focus on customer satisfaction and responsible
gambling practices, B90 Holdings is dedicated to shaping the future of the
online gaming landscape.

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