LAS VEGAS, NV, Aug. 20, 2024 (GLOBE NEWSWIRE) -- Golden Matrix Group, Inc. (Nasdaq: GMGI) (“GMGI” or the “Company”), a developer and licensor of online gaming platforms, systems and gaming content, today announced that it has entered into a definitive agreement to acquire an indirect 80% controlling interest in Classics for a Cause Pty Ltd (“CFAC”), a leading independent online discount platform in Australia.
This strategic acquisition marks GMGI’s entry into the consumer loyalty and rewards industry, complementing its existing operations in the gaming and sports betting sectors and solidifying its position as a premier tournament operator. Moreover, it provides a significant opportunity to scale CFAC's business and expand the firm’s operations globally.
CFAC operates a well-established business-to-consumer (B2C) platform that offers paid members access to a wide range of discounts from retailers across Australia. The company rewards its members with free entries into promotional giveaways, which feature luxury, high-end American and Australian classic cars, caravans and campers as well as cash and vacation giveaways.
Business Highlights:
CFAC generated over $10 million in revenue and more than $1.9 million in operating profit before tax* for the 12-month fiscal year ending June 30, 2024.
CFAC has generated considerable free cash flow over the last two fiscal years.
The company boasts a social media following exceeding 50,000 and a customer base of more than 300,000, with over 10,000 active monthly subscribers.
Recurring monthly subscribers contribute over 30% of CFAC’s total revenue.
*Net operating income before tax calculated for the 12-month period ending June 30th 2024. Financials presented in Australian Dollars and written on a cash basis. With cash basis accounting, revenue and expenses are recorded when cash is received or paid out. Post transaction financials will be presented in terms of GAAP and presented on an accrual basis.
Under the terms of the agreement, Golden Matrix Group will acquire its 80% stake in the entity which owns CFAC at a purchase price representing a multiple of roughly 5x profits before tax, declared for fiscal year ending June 30th 2024, totalling approximately $8.4 million inclusive of the earnout component. Of this amount, 70% will be paid in cash, with the remaining 30% settled through the issuance of restricted shares of GMGI common stock.
The agreement includes provisions for a holdback amount and an earnout, contingent upon CFAC meeting certain post-closing profit targets. Additionally, GMGI will inherit a call option to acquire the remaining 20% minority interest.
The acquisition is subject to customary closing conditions, expected to be fulfilled within the next several days, with an effective date of August 1, 2024.
Commenting on the acquisition, Brian Goodman, CEO of Golden Matrix, said, “We are thrilled to proceed with this acquisition as it aligns perfectly with our strategy of acquiring profitable and accretive businesses. Our previous acquisition of RKings Competitions has been a phenomenal success, significantly contributing to our revenues and profits, and we anticipate similar results with CFAC. CFAC will provide a strong foundation to build on, as was the case with RKings, and we expect this acquisition will not only enhance our revenue and cash flow but will also add to our bottom-line profitability. We are confident in our ability to scale CFAC, implement cost efficiencies, upgrade its technology and further strengthen its free cash flow.”
Thomas Bailey, founder of CFAC, added, “We are incredibly excited to join forces with GMGI and contribute to their ongoing success. This partnership offers a significant opportunity to expand CFAC into new markets and elevate the company to new heights.”
Thomas Bailey will continue in an executive role with CFAC, where he will oversee the company's growth and lead the roadmap for its planned expansion into the U.S. Tom co-founded CFAC in 2019 to support Australian veteran charity programs. Over the past decade, he has played a pivotal role in successfully establishing over 14 start-ups and has a strong background in marketing and implementing growth strategies.
According to Research and Markets, the consumer loyalty and rewards market will continue to grow and is forecasted to record a CAGR of 9.5% from 2024-2028, as well as an increase from $3.64 billion in 2023 to $5.79 billion by 2028.
For full details of the purchase agreement and related terms, please refer to the Current Report on Form 8-K filed today with the Securities and Exchange Commission.
About Classics for a Cause (CFAC)
Classics for a Cause (CFAC) is a premier discount club that offers its members valuable shopping rewards, exclusive discounts and cashback deals from a diverse range of high-profile brands and popular entertainment and dining establishments. With an extensive and growing list of brand partners, CFAC stands out as a leading provider of trade promotions in Australia. Members of the CFAC discount club enjoy the added benefit of participating in exciting free giveaways, featuring prizes including high end and rare Australian and American classic cars and have recently expanded into campers, caravans and cash giveaways.
CFAC was created to address the funding needs of under-resourced veteran programs, and in 2019, the organization gave away its first classic car, an Eleanor Mustang, to raise essential funds. Since then, CFAC has given away over 70 high-end classic cars and raised and donated more than $3 million to veteran charities. The organization currently gives away two classic cars per month, with plans to increase this to four per month while expanding into prize homes and cash prizes later this year.
CFAC remains closely aligned with Veteran Affairs in Australia and proactively supports veterans and their families. The company is also a regular contributor to multiple charities and social organizations, supporting Australian veterans. CFAC believes in ‘Paying it Forward’ and is committed to expanding its charitable efforts while providing every member with a wide range of rewards, discounts and valuable opportunities to win high end prizes.
About Golden Matrix
Based in Las Vegas, NV, Golden Matrix Group is a leading gaming technology company with a global presence, operating across multiple international markets. The Company specializes in both B2B and B2C sectors, leveraging proprietary technology to deliver innovative solutions. Golden Matrix's B2B division focuses on developing and licensing branded gaming platforms to a broad client base, while its B2C division, RKings, runs a high-volume eCommerce site that allows users to participate in paid competitions on its exclusive platform in authorized regions. Additionally, the Company owns and operates MEXPLAY, a regulated online casino in Mexico. In 2024, Golden Matrix expanded its international footprint with the acquisition of Meridianbet, a prominent B2B and B2C sports betting and gaming platform, which operates under regulation in multiple markets across Europe, Africa and Latin America.
