Adds Sweden and Spain to its gaming business. The company announced plans to purchase Bethard, a sports betting operator in Sweden and Spain for $19.5 million and 12% of net gaming revenue for 2 years. The company generated $31 million in revenue in 2020. As such, we estimate that the net purchase price will be roughly $27 million to $30 million. The acquisition is viewed favorably. Strategically important market. Bethard offers an established gaming brand in the large Swedish esports market, providing significant cross selling opportunities for esports betting. Helix on track. As mentioned in an earlier call with investors, management indicated that it plans to offer a convertible preferred, which will likely fund the Helix and a large portion of the Bethard transactions. We believe that the company appears to be on track to close the Helix transaction imminently. The Bethard transaction is expected to close on July 1st. Raises guidance. Given the likely closing of the Helix and Bethard transactions, the company raised its fiscal 2022 revenue guidance from $70 million to a range of $100 million to $105 million. We estimate that Bethard has roughly 10% operating cash flow margins. Given the anticipated payout for the Bethard acquisition, however, we do not anticipate significant cash flow contributions for the next 2 years. As such, we are maintaining our fiscal 2022 adjusted EBITDA estimate at this time. Compelling stock valuation. Near current levels, the GMBL shares trade at 3.5 times Enterprise Value to our fiscal 2022 revenue estimate, or well below its igaming and esports peers, trading at average multiples of 8.5 times. In addition, the shares trade at roughly 60% below average M&A transaction multiples. The shares are rated Outperform with a $20 price target. Read More >>