- Gaming operator Golden Matrix Group, Inc. (NASDAQ: GMGI) has acquired MeridianBet Group for $300 million
- Deal creates an international powerhouse with $182 million in sales, $76 million of Ebitda expected in 2025
- New company broadly diversified across 15+ markets with leading footholds in Serbia, Montenegro, Bosnia and more
- More topline growth potential from fast-growing markets such as Mexico, Tanzania and Peru
- Boasts over 7 million online players and 3.5 million retail customers after merger
- Proprietary tech platform is scalable and continuously improving via machine learning
- Innovations such as Empty Bet allow bettors to create customized bets and find players to join in
- Combined company has enterprise value of $400 million or 5x 2025 Ebitda, well below multiples for DraftKings Inc. and Caesars Entertainment Inc.
- Financed conservatively with just 2x leverage expected following merger
- Company is poised for more possible M&A with either cash or Nasdaq-listed stock
- Led by CEO Brian Goodman, who brings decades of international gaming experience
From sports to slots, online gaming has created a global fever – and a chance to invest in winning companies. Savvy investors need to pick their gaming-stock bets carefully.
A standout company to watch is Golden Matrix Group, Inc. (NASDAQ: GMGI), which this week acquired MeridianBet Group for $300 million. The deal creates an international powerhouse across more-than 15 regulated gaming markets.
The merger comes as online gaming revenue is expected to boom in coming years. Worldwide revenue is forecast to reach $28 billion this year and rise to $33 billion by 2027, according to Statista. And as mainstream media companies embrace gaming content – from TV shows to betting inside stadiums – the cultural phenomenon should gain yet more momentum. Even ESPN, owned by the traditionally conservative Walt Disney Co., has gotten into the game.
But while there are many ways to bet on online gaming growth, there are several reasons investors should focus on GMGI and MeridianBet. First, both companies have a long history of profits.
That contrasts sharply with operators in large, competitive markets like the U.S. Indeed, market darling DraftKings Inc. continues to lose money as it fights for share of a viciously competitive market.
GMGI, meanwhile, will pick up a leading position in several markets where MeridianBet has been known for years and is consistently a top-three player. Those include Serbia, Montenegro, Malta and Cyprus, where the company has a deep understanding of local markets and regulation, building out robust networks of in-shop retail and online operations.
In jurisdictions like Serbia or Montenegro, MeridianBet represents the oldest brands. It’s known in those countries for the dominant sports betting platforms with the strongest consumer recognition.
Notably, MeridianBet can hold its own even in a fiercely competitive and regulatorily strict jurisdiction like Malta. That market, while one of the most saturated and competitive in Europe, has still been a success for the company and it remains agile and responsive to market changes.
Emerging markets are also key to the story. In places such as Tanzania and Peru, it is critical to have physical real estate to cultivate trust and brand awareness, while also offering cash deposits and withdrawals. The combined company has over 700 such locations around the world.
GMGI itself brings key emerging market assets to the table. It already owns MexPlay, the only iGaming business that provides access to casino, sportsbook, and competition products and is fully licensed by the Mexican government.
The company can also reap the benefits of its technology investments. The company employs a proprietary platform, BetShopManage, that’s scalable and also boosted by AI: Machine learning helps it constantly improve performance.
MeridianBet has advanced other initiatives that separate it from rivals. One is Empty Bet, which allows players to propose bets that aren’t yet offered, effectively creating new markets to meet customer demand.
At the helm is CEO Brian Goodman, who founded GMGI and will remain in his role after the deal. He brings over 20 years of gaming-industry experience in jurisdictions around the world.
Looking ahead, this all adds up to an impressive growth trajectory. The company sees revenue growing 16% to $182 million in 2025 with Ebitda surging 42% to $75 million.
There’s also scope to expand and diversify through M&A. The company is financed conservatively just 2x leverage, which means cash deals are feasible. And of course the larger company has Nasdaq-listed shares that could be used as a currency.
Perhaps best of all, the market may not fully recognize GMGI’s potential. The company has an enterprise value, adjusted for net debt of $400 million, only 5 times 2025 expected Ebitda. That compares with multiples of 8 times for Caesar’s Entertainment and a whopping 22 times for DraftKings, according to Sentieo, an AI-enabled research platform.
Last but not least, the company is dedicated to corporate social responsibility (CSR). It has a program in place that turns players into patrons who directly support CSR programs.
With an enviable global footprint, a track record of profits and a reasonable valuation, GMGI has the ingredients for success. Smart investors will consider putting some chips in before the word gets out.
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