Jumbo Interactive completes StarVale acquisition
The lottery retailer paid £23m for the lottery manager and digital payments business.
UK.- The Australian lottery retailer Jumbo Interactive has completed its acquisition of UK lottery manager and digital payments business StarVale Group. It announced last month that it intended to complete the deal on November 1 after receiving approval from the Gambling Commission.
Jumbo initially thought the deal would not complete until next year due to a drawn-out regulatory approval process.
In January, Jumbo had reached a deal to pay £23m for StarVale, comprising an initial £12m and £6.5m in surplus cash funds. Up to £4.5m will be held in escrow as a deferred consideration payable in the first half of 2024 subject to the achievement of earnings targets for the 12 months ending June 30 next year.
Jumbo paid 63 per cent of the consideration from cash reserves and 37 per cent with existing debt facilities. It says it remains in a net cash position.
StarVale will form part of Jumbo’s Managed Services business segment with Gatherwell, which it acquired in 2019, and Stride Management in Canada. It supplies lottery management and payment services to more than 45 charity and not-for-profit lotteries and 850,000 lottery players. It provides direct debit payment services through DDPay Ltd.
Last year, Jumbo Interactive raised concerns about a loophole in the UK that allows prize draws to avoid regulations that cover lotteries and raffles. Its research found that nearly one in ten people who entered ‘big ticket’ prize draws, for example, those that offer the chance to win multi-million-pound houses or luxury cars, ended up in debt as a result.
