Jumbo Interactive bucked the wider market slump and gained over 2% after it announce it would acquire StarVale Group, a leading UK External Lottery Manager and digital payments company.
The acquisition aligns with Jumbo’s strategy to build scale in its Managed Services and Software-as-a-Service business segments, and provides Jumbo with another established and reputable ELM including a digital payments company with a high quality client base and proven track record of success.
The acquisition follows the successful acquisition of UK-based Gatherwell in November 2019 and the conditional acquisition of Canada-based Stride Management in August 2021. Once complete, StarVale will form part of Jumbo’s Managed Services business segment, along with Gatherwell and Stride.
Lancaster-based StarVale provides services to over 850,000 active lottery players across over 45 charities and not-for-profit organisations. StarVale also comprises of DDPay Ltd, a wholly owned subsidiary and digital payments company that facilitates Direct Debit payments and Direct Credit payment solutions to StarVale’s weekly lottery clients.
For the 12 months ended 31 December 2021, StarVale is forecasting to generate £63 million in Total Transaction Value with Adjusted Revenue of £5.1 million and Adjusted Net Profit Before Tax £2.0 million.
Jumbo will conditionally acquire StarVale for ~£17.0 million, and up to £4.0-£4.5 million of deferred consideration subject to achieving certain earnings hurdles.
Completion of the transaction also remains subject to UK Gambling Commission approval which is anticipated by the end of FY22.
Jumbo Interactive CEO and Founder Mike Veverka said “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. The acquisition helps accelerate our strategy to grow internationally and adds significantly more scale to our Managed Services business in the UK.”