GiG Software confirms €16.4m 888Africa acquisition

GiG Software has agreed to acquire an 80% stake in 888Africa from an evoke plc subsidiary for €16.4 million, marking the company’s return to the B2C market. The agreement, unveiled on August 26, involves €6 million of upfront payment and €10.4 million of performance-based payment. The remaining part amounting to 20% will remain with the founders of 888Africa and they will continue to operate the business. 888Africa is having operations in multiple African countries with Mozambique being the strongest in terms of performance. The acquisition is estimated to give GiG Software a lucrative cash-generating business-to-consumer (B2C) operation which also means a bigger entry into the online gambling market in Africa. To support the acquisition, GiG Software intends to issue shares for €8.5 million. It can be expected that the share issue will provide approximately 70% of the amount and the convertible loans would account for the rest. The proceeds of €6 million will fund the initial payment for the acquisition and the remained will be used for other operational needs. GiG has claimed that this method of financing would allow it to fulfil share offering faster and cheaper compared to the traditional rights issue. This transaction would allow GiG Software to return to the B2C segment after leaving Gentoo Media. The company experienced losses each quarter since it cut ties with Gentoo Media. The finalization of the agreement is contingent on the achievement of various legal approvals, as well as the signing of the share purchase agreement. After the announcement of the deal, the shares of GiG dropped around 20% to SEK 1.38.