Toronto-listed software supplier Contagious Gaming has entered into a definitive agreement to complete the acquisition of sports betting solutions provider Digitote in a CAD$7.15m (€5m) deal.

The deal, first announced in May this year, will see Contagious pay a share consideration of CAD$4m (€2.8m), to be satisfied through the issuance of new shares at price per shares of 50 cents for 8,008,000 shares, alongside a earn-out consideration equal to EBITDA for the four years following the closing of the acquisition, and capped at €2.2m.

For this price, it acquires a business with offices on the Isle of Man and in Berlin, which offers customers Xturf, a proven multi-channel sportsbook platform that is used by the likes of Winners (bwin Spain), digibet and Belgium’s Betcenter.

Contagious says that Digitote has handled more than $10bn in wagers sice its inception, and covers over 30,000 unique events each month and more than 18,000 live bets simultaneously.

“We are excited to move forward in our growth plan with Contagious Gaming,” Digitote chief executive Guenter Boyks said. “The combined synergies offer huge potential with significant opportunities to expand into international markets and grow the combined entities’ revenues.”

Contagious chief executive Peter Glancy commented: “We are delighted to announce that we have entered into a definitive agreement to acquire Digitote which expands and enhances our sports betting offering. The acquisition enables us to provide our existing and new customers with a fixed odd sports betting platform alongside Goal Time.

"Digitote's software has a 30-year history as an extremely robust sports betting platform with a proven track record of handling over $10-billion of Web, mobile and land-based wagers throughout Europe.”

Contagious noted that the deal offers the opportunity to achieve a number of synergies and growth opportunities, namely through the fact that the company will be able to offer both in-play and fixed-odds betting alongside its pari-mutuel sports betting product Goal Time. This, it said, will allow for cross-selling opportunities, while the Xturf solution will also offer increased customer financing options for Goal Time.

It will also retain Digitote’s experienced management team, while the deal is being completed at an "attractive" price, and will be immediately accretive to EBITDA and earnings. Digitote is also free of any long-term debt and will be delivered with positive working capital.

The supplier is also looking to acquire London-listed operator Sportech, after it was granted an extension in which it can make a definitive offer for the business earlier this month, meaning it has until November 6th to submit a bid.

Shares in Contagious Gaming Inc (Co.Data) (CNS:TSV) closed up 2.42 per cent at CAD$0.19 per share in Toronto yesterday.

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