Golden Matrix to acquire 80% interest in Australia’s Classics for a Cause

Tuesday, August 20, 2024 11:42 AM
  • Rege Behe, CDC Gaming

Golden Matrix Group Tuesday announced that it has entered into a definitive agreement to acquire an indirect 80% controlling interest in Classics for a Cause, an independent online discount platform in Australia.

The strategic acquisition is Golden Matrix Group’s entry into the consumer loyalty and rewards industry, complementing existing operations in the gaming and sports betting sectors.

The acquisition also provides a significant opportunity to scale Classics for a Cause’s business and expand the firm’s operations globally.

“We are thrilled to proceed with this acquisition as it aligns perfectly with our strategy of acquiring profitable and accretive businesses,” said Golden Matrix CEO Brian Goodman in a statement. “Our previous acquisition of RKings Competitions has been a phenomenal success, significantly contributing to our revenues and profits, and we anticipate similar results with Classics for a Cause. Classics for a Cause 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 Classics for a Cause, implement cost efficiencies, upgrade its technology and further strengthen its free cash flow.”

Classics for a Cause generated over $10 million in revenue and more than $1.9 million in operating profit before taxes for the 12-month fiscal year ending June 30, 2024. The company has a social media following exceeding 50,000 and a customer base of more than 300,000, with over 10,000 active monthly subscribers.

Per the agreement, Golden Matrix Group will acquire its 80% stake in Classics for a Cause at a purchase price representing a multiple of roughly 5x profits before tax, declared for the fiscal year ending June 30th, 2024, totaling 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 Golden Matrix common stock. The agreement includes provisions for a holdback amount and an earnout, contingent upon Classics for a Cause meeting certain post-closing profit targets.

Additionally, Golden Matrix Group will inherit a call option to acquire the remaining 20% minority interest.

“We are incredibly excited to join forces with Golden Matrix Group and contribute to their ongoing success,” said Classics for a Cause Founder Thomas Bailey. “This partnership offers a significant opportunity to expand Classics for a Cause into new markets and elevate the company to new heights.”

Bailey will continue in an executive role with Classics for a Cause, overseeing the company’s growth and and planned expansion into the U.S.

The acquisition is subject to customary closing conditions and is expected to be fulfilled within the next several days. It will be effective on August 1, 2024.