Charles Gillespie of Gambling.com Group speaks to SiGMA TV
Fresh from his M&A panel discussion at the SiGMA Conference in Malta, Gambling.com Group’s CEO Charles Gillespie joins Pips Taylor for an exclusive SiGMA TV interview about his experience at years highly anticipated conference and shares his insights into the main issues surrounding acquisitions in the current affiliate market.PT: I'm with Charles Gillespie, who is the CEO of Gambling.com Group. Charles how are you finding SiGMA so far?
CG: Absolutely fantastic. I'm blown away by how many people are here and how busy the entire show is.
PT: Yeah, it's a big one this year, isn't it? Tell us a little bit about Gambling.com Group and what you do?
CG: Gambling.com Group is one of the largest casino affiliates in the industry. We mostly focus in the UK. Of course, Gambling.com is one of our websites but we have about 50 websites. We are growing 'hand over fist', we are also doing acquisitions as well. The company is headquartered in Malta so we are happy to be here at SiGMA and we are very much growing our office in Dublin, where we have most of our people in the organization.
PT: Fantastic. You have just been speaking on a panel. Tell us a little bit about that and what the main issues you were speaking about were?
CG: The panel was about mergers and acquisitions, obviously a very hot topic these days in terms of affiliates trying to figure out how much their business in worth, sell it and whether it's their golden ticket. We have done €14 million worth of acquisitions this year and we just raised another €9 million last week, so we can do more.
I think the takeaway from the panel is basic stuff; you need to be prepared, you need to have all your accounts in order, you need to be able to present clean financials to anybody who is going to look at the business. Before you begin that process, you really need to make the decision whether you want to sell the business in the first place. Some people have these exploratory talks and go into the process half prepared and then change their mind late in the process. That's obviously frustrating for buyers in the market. The buyers want a lot of the same things; they want revenue from regulated markets, they want high portion of revenue share. In a business, that just lowers the risks as opposed to having a business dominated by CPA revenue. They want simple things. If I can buy one website that makes €100,000 a month than that's a lot easier than buying a company with one hundred websites that makes €100,000 a month.
Similar to that is scale. To do a deal for a website that makes €200,000-€300,000 is about the same amount of work as it would be to buy one that makes €50,000 a month so you might as well buy the one that's bigger and get a bigger impact.
PT: And how easy is it to scale a business like that?
CG: It's hard and that’s why you see such surprising prices for a lot of these affiliate websites. In many cases these websites are quite simple, run by one or two people but they fetch a pretty impressive price. The reason is that it is actually quite hard to do this - achieving very competitive search engine rankings with Google on competitive keywords is neither is easy nor fast. It takes a couple of years to do it the right way. So, that's why I think you see high prices.
In terms of scaling the business, from the perspective of the larger affiliates that are aggregating the smaller affiliates, we definitely like acquisitions where we can add something. If it looks like it can fit in well with our technology platform, if we think we can improve the commercials, and trim some costs, just make the assets perform better, then it would definitely be more interesting to us.