Jumbo to expand UK presence with $32m acquisition of StarVale

Jumbo to expand UK presence with $32m acquisition of StarVale

Digital lottery service provider Jumbo Interactive (ASX: JIN) has entered into an agreement to acquire UK-based external lottery manager StarVale for $32.1 million in a bid to strengthen its global presence.  

The move aligns with the Brisbane-based company’s strategy to scale its managed services and software-as-a-service (SaaS) business segments, as it follows the purchases of Canada-based Stride Management in August 2021 and UK-based Gatherwell in November 2019.

The purchase will be funded via Jumbo’s $50 million senior debt facility, with the remaining $20 million to be used for future acquisitions and growth initiatives.

“We identified StarVale as one of our top acquisition opportunities in the UK given their scale and leadership position in the charity lottery market, strong brands, cultural alignment with Jumbo, and their talented leadership team,” says Jumbo Interactive CEO and founder Mike Veverka.

“The acquisition helps accelerate our strategy to grow internationally and adds significantly more scale to our Managed Services business in the UK.”

Based in Lancaster, StarVale operates a range of society lottery services (weekly lottery and raffle) and prize draw services and will provide Jumbo access to more than 850,000 lottery players across 45 charities and not-for-profit organisations.

If the UK company achieves certain earnings hurdles, between $7.5 million to $8.5 million of deferred consideration will also be payable on 30 June 2023.

The buy will also include access to StarVale’s digital payments subsidiary DDPay, which is expected to provide cost efficiencies for Gatherwell and the company’s wider UK operations.

StarVale’s management team will remain with the business post completion of the acquisition, including director and founder Phil Magleave.

“I'm delighted that StarVale will soon join the Jumbo family and am looking forward to working with Jumbo to continue supporting our charity and not-for-profit clients raise vital funds for their ‘good causes’,” says Magleave.

“With ongoing changes in technology and increased digitisation expected in the lottery industry, the acquisition by Jumbo will expand its product range and the opportunities available to its valued clients – and grow what is already a highly successful business.”

Completion of the transaction remains subject to UK Gambling Commission approval, which is anticipated to occur by the end of FY22.

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