Catena Media looking to sell Financial Trading and possibly other sites
After seeing its shares plunge to a 52-week low following the release of its Q1 financial results last week, online gaming and financial trading lead generation company Catena Media plc (STO:CTM) announced Friday that it was initiating a “strategic review of certain parts of its business.”
The company said that this could involve a sale of certain assets, including but not limited to its Financial Trading related websites, the “AskGamblers” brand and other global brands, or another type of structural transaction. Catena added that it is “noticing a strategic interest” from third parties to acquire certain assets, including those listed above.
In 2017-2018 Catena made a concerted effort to grow from its base of gaming affiliate websites into the “financials” area, spending tens of millions of dollars in acquiring a number of (mainly) FX broker affiliate and news websites such as DeutscheFXBroker.de, BrokerDeal.de, ForexTraders.com, TheBull.com.au, TheBull.asia, FatCat.com.au, LearnTrading.com.au, LearnCFDs.com, hammerstonemarkets.com, and Leaprate.com.
The company hired FXcompared.com Global General Manager Nigel Frith in early 2018 to head the Financial Trading group out of London. Initially, the Financial Trading segment comprised about 5-6% of overall Catena revenues, in 2020 bringing in €5.8 million in revenues and EBITDA of €1.3 million. However Catena announced toward the end of 2020 that it “won’t be making further investments into the Financial Services segment.” Revenue from the Financial Trading segment tumbled to just 2% of company revenue by Q1-2022 (just €0.8 million for the quarter), and Mr. Frith was reassigned within the organization.
Within Catena’s Financial Trading arm, the German market accounts for about half of the segment’s revenue.
Overall, Catena has made a major shift toward North America in the past year as the US and Canada are legalizing online and sports gambling. In early 2021 the company named its head of US operations, Michael Daly, as company CEO. For Q1-2022 North America represented 65% of company revenue, up from 31% in the 2020 fiscal year and 51% in 2021.
Catena shares responded to the news by trading up 14% on Friday, closing at kr42.00 – up from their 52-week low of kr35.40 set earlier in the week, but still well below their kr75.82 52-week high set last June.
The full text of the Catena Media release follows:
Catena Media initiates strategic review of certain parts of its business
May 20, 2022 13:45 CET
Catena Media plc (”Catena Media”)’s board continuously evaluates strategic initiatives, including potential transactions, structural changes and other strategic initiatives with a view to achieving the best outcomes for the company and its shareholders in the long term. Catena Media is currently noticing a strategic interest from third parties to acquire certain assets, including assets in its financial trading segment, the “AskGamblers” brand as well as certain other of Catena Media’s global brands.
In light of this, Catena Media has initiated a strategic review, which will be broad, consider all feasible alternatives and assets of the group to ensure an optimal outcome, and may include investigating the advantages of, e.g., a sale of certain assets (including but not limited to financial trading assets, the “AskGamblers” brand and other global brands) or another type of structural transaction.
Catena Media wishes to emphasise that no decision has been taken with respect to the strategic review, and that it may conclude that the best alternative is to make no changes in the near term.