Super Group agrees €140m deal to acquire Apricot tech amid 12% revenue jump in Q1

Super Group has penned a €140m deal to acquire its sports betting software technology from its long-term partner Apricot in a landmark move for the Betway and Spin parent company.

Super Group confirmed it had entered discussions with Apricot in November 2022 with a view to acquiring the tech stack, with the brand also handing the supplier a €43m loan to cover “substantial resources” dedicated to Betway.

The agreement announced today, 8 May, will see Super Group assume full control of the sports betting tech licensed by Apricot.

The New York-listed firm said the deal would bring Super Group “closer to its goal of fully owning and controlling its sportsbook technology across its worldwide markets”.

The business added it would also allow for the group to “apply this technology stack to any properties it may buy or build in the future”.

The structure of the deal will see Super Group pay a total consideration of around €140m, plus additional payments based on certain earnout conditions.

The initial nine-figure sum will consist of around €100m which will be paid in the form of a cancellation of an outstanding loan.

Super Group will then pay the remaining €40m in two equal instalments over the next two years.

Bosses confirmed that of the €40m, up to €20m may be paid in Super Group’s ordinary shares.

Additional payments totalling €210m could be made via an earnout mechanism should Super Group’s sports betting revenue more than double between now and 31 December 2025.

The deal is expected to conclude within six to 12 months based on “supplemental licensing from relevant gambling regulators”.

Neal Menashe, Super Group CEO, said he was “delighted” to have finalised terms for the agreement.

The CEO remarked: “We have been working closely to agree to an equitable deal with a favourable structure for both parties.

“This is an exceptional opportunity for Super Group to take full control of our sportsbook technology, which would enable maximum flexibility for organic growth as well as M&A opportunities.

“We’ll continue to deliver the best sports betting and gaming experience to our customers around the world as the benefits of this deal are realised,” he added.

Alongside confirming the move for the Apricot tech, Super Group has reported a 12% year-on-year (YoY) jump in revenue for Q1 2024 to €379.3m, driven primarily by growth in Africa and Canada.

Adjusted EBITDA for the first three months of the year shot up 29% from €36.1m to €46.5m, while post-tax profit swung from a €1.9m loss in Q1 2023 to a €41m gain this year.

Super Group noted its post-tax profit was bolstered by a €40.1m gain on the disposal of the B2B arm of Digital Gaming Corporation to Games Global.

Elsewhere, the firm reported a 33% YoY leap in monthly active customers to 4.7 million.

Breaking revenue down by region, ex-US revenue landed at €374m, a record for the group. North America, predominantly Canada, and Africa accounted for around €140m of revenue each during the reporting period.

Online casino also took the lion’s share in terms of vertical, with 79% of group revenue coming from the arm, up from 74% in Q1 2023.

In terms of figures, online casino across Betway and Spin returned €292.2m in revenue while sports betting accounted for €76.9m.

In fact, sports betting revenue dipped 7%, which bosses pointed to as a result of exiting India, while online casino improved by 22%.

Management confirmed the review of US operations, as announced earlier this year, was still ongoing.

On the results, Menashe said: “We’ve had a phenomenal start to the year, continuing our momentum from a strong end to 2023.

“This robust performance has been delivered by our global team’s ongoing focus and investment into core markets that are yielding strong returns, providing us with a solid foundation for the remainder of the year.”