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- Jumbo Interactive’s (JIN) latest acquisition is already bearing fruit, exceeding its revenue and profit targets just one year after its buyout
- The ASX 200-listed lottery manager bought ethical lottery provider Gatherwell in November 2019, launching into the U.K. market
- As part of that £5 million deal (worth around A$9.1 million at the time), two earn-in agreements were put in place, with £1 million (around A$1.83 million) to be paid if Gatherwell met its financial targets in FY20 and FY21
- Following the company’s success, Jumbo will pay out the £1 million in cash to a U.K. account and has flagged a similar payment next year if Gatherwell continues to perform
- On the back of today’s news, Jumbo shares are almost 8 per cent higher, worth $12.60
Jumbo Interactive’s (JIN) latest acquisition is already bearing fruit, exceeding its revenue and profit targets just one year after its buyout.
The ASX 200-listed lottery manager bought ethical lottery provider Gatherwell in November 2019, launching into the U.K. market.
The £5 million deal (worth around A$9.1 million at the time) formed a key part of Jumbo’s vision to reach $1 billion in lottery ticket sales by 2022.
And it seems the company is well on its way to reaching that target after Gatherwell beat its financial projections.
More broadly, that achievement means Jumbo’s first milestone earn-in payment is now due.
Under the share purchase agreement, the £5 million balance was spilt into tranches. Essentially, ₤3 million (around A$5.4 million back then) was payable in cash when the acquisition went through.
Then, the remaining ₤2 million (approximately A$3.7 million at the time) in proceeds was set aside under two equal earn-in agreements. It means £1 million (around A$1.83 million) would be paid out after the 2020 and 2021 financial years came to an end if Gatherwell met its revenue and profit targets.
Following Gatherwell’s success, Jumbo will pay out the £1 million in cash to a U.K. account and has flagged a similar payment next year if its acquisition continues to perform.
On the back of today’s news, Jumbo shares are almost 8 per cent higher, worth $12.60 at 2:11 pm AEDT.
