Better Collective CEO quashes M&A talk as macroeconomic conditions worsen
Jesper Søgaard stresses affiliate heavyweight keeps one eye on the market but describes conditions as “not the most ideal”
Better Collective CEO Jesper Søgaard has poured cold water on any imminent M&A activity at the affiliate giant. Søgaard moved to temper expectations around the Stockholm-listed firm’s recent M&A charge following the group’s Q3 results. Better Collective posted a 32% year-on-year jump in revenue to €59.7m (£52.03m), while US revenue increased by 17%. This slowdown in growth followed on from the firm cutting up to 10% of its US workforce after Søgaard previously argued the group would be “very aggressive” in the market. Since May 2021, Better Collective has had an impressive M&A pipeline, beginning with the $240m acquisition of Action Network in the US – the largest deal in the affiliate sector to date. The firm followed this by acquiring two Dutch affiliates ahead of the market launch in October 2021 and then netting Canada Sports Betting for €21.4m in March 2022. Better Collective also parted with €105m to acquire Futbin, a platform that was established in 2014 to help FIFA Ultimate Team (FUT) players find the correct prices quickly and reliably In May, management dismissed speculation over a reported £500m acquisition of Spotlight Sports Group, the parent company of daily horseracing and sports betting newspaper the Racing Post. Speaking on the potential slowing of the M&A pipeline, Søgaard said: “The current market may not be the most ideal for this, especially with the private businesses, most of them are cash flow positives. And when prices are dampened, they are not that interested in selling. “If we, all of a sudden, see an exciting opportunity in sort of a distressed sale, we have the capacity to execute it, and we always entertain and engage with our M&A pipeline. But timewise, I think it’s just hard to predict right now what will happen,” he added. The CEO contended that his words were not dissimilar to the group’s recent comments around M&A, and that this was not a hugely significant change despite the darkening macroeconomic environment. “But it’s not like things significantly changed from our usual commentary related to M&A. We have a strong pipeline. We engage with a lot of conversations, whether or not it’s possible to come to price agreements right now. It’s just very hard to predict and say,” Søgaard concluded.