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2016-12-14

Catena Media: Catena Media takes a leading position in the US market - acquires regulated affiliate assets

Catena Media continues to establish its strong and fast growing
position in the lead generation market within iGaming through an
acquisition of websites and other affiliate related assets from three
US founders. The total upfront purchase price amounts to USD 15
million, whereof 25 percent will be settled with 440,669 new Catena
Media shares. Additional earn-out payments can amount to a maximum of
USD 45 million, and are based on revenue performance during the next
three years.

The acquired assets' current revenue run rate is around EUR 1 million
per quarter, with an operating margin of around 75 percent. The
generated revenues stem from licensed operators in the regulated
Casino and Poker markets in the states of New Jersey and Nevada.
Following the acquisition, it is estimated that close to 50 percent
of Catena Media's revenue will be derived from regulated markets. The
acquired assets, for example playnj.com (https://www.playnj.com/) and
uspoker.com (http://www.uspoker.com/), will have a direct positive
effect on Catena Media's search revenues as of the consolidation date
on 15 January 2017.

In addition to the affiliate assets targeting New Jersey and Nevada,
and included in the upfront purchase price, Catena Media is acquiring
a range of assets which are expected to generate significant revenues
if, and when, other US states re-regulate iGaming.

Following the acquisition, Catena Media adds three new verticals to
its business. In addition to Poker, the company is also acquiring
websites targeting eSports and Daily Fantasy Sports.

"We are very excited about this opportunity, which will not only see
Catena Media becoming the largest regulated casino affiliate in the
US, but also puts us in pole position to take advantage of further
re-regulation in what has the potential to become the world's largest
iGaming market. This is an important step in realizing our vision to
become the world's number one provider of high value iGaming leads",
says Robert Andersson, CEO of Catena Media.

As of today the US market stands for about 20 percent of the total
online Casino market. In the US, some states have reregulated to
permit online games, such as Nevada (poker), Delaware (all game
types) and New Jersey (all game types). Also, positive initiatives
are underway to re-regulate in other states.

"We are impressed with Catena Media and are excited to join their
strong and experienced team, which will enable us to take advantage
of the many strategic and financial benefits expected from the
regulation in the US. We look forward to continuing the journey we
have started, and Catena Media is a great match for us", says Aaron
McCann, co-founder and seller.

Details of transaction structure

The upfront purchase price amounts to USD 15 million, whereof 25
percent will be settled with 440,669 new Catena Media shares.
Additional earn-out payments can amount to a maximum of USD 45
million, whereof half can be paid in shares, and are based on revenue
performance during the next three years. In a reasonably expected
scenario with a total earn-out purchase price of USD 20.5 million,
the sellers must generate revenue growth of more than 150 percent
during the period.

The transaction also includes certain terms regarding an additional
range of assets, which are expected to generate revenues if, and
when, other US states re-regulate iGaming. Revenues from these
assets, which includes eSports and Daily Fantasy Sport assets, are
not subject to the earn-out calculation above. The sellers have a
right to 50 percent of the net profit generated from such assets
going forward. The sellers have a put option after 3, 5 or 10 years
while Catena Media has a call option after 7 or 10 years, for Catena
Media to acquire the sellers right to net profit share regarding
these assets. The purchase price will be between 2.5 and 3 times the
net profit generated from these assets in the 12 months prior to
exercising the option.

For further information, please contact:

Robert Andersson, CEO, phone: +356 770 329 28, e-mail:
robert@catenamedia.com

www.catenamedia.
The information was submitted for publication, through the agency of
the contact person set out above on December 14, 2016 at 07.30 CET

About Catena Media

Catena Media is a fast-growing online performance marketing and lead
generation company within iGaming with portals like AskGamblers
(http://www.askgamblers.com/) and RightCasino
(http://www.rightcasino.com/). The Group has established a leading
market position through strong organic growth and acquisitions in its
core markets. Catena Media was listed on Nasdaq Stockholm First North
Premier in February 2016. By the end of the third quarter 2016, the
company's revenues reached approximately EUR 34.0 million on a
twelve-month basis. The Group was founded in 2012 and has today about
200 employees. The Group Head Office is situated in Malta. The
company's certified advisor is Avanza.

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http://news.cision.com/catena-media/r/catena-media-takes-a-leading-posit...
http://mb.cision.com/Main/12863/2148533/603464.pdf

Författare WKR

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