Nuvei Will Acquire Mazooma, A U.S. Based Gaming, And Sports Wagering Payment Technology Provider
Nuvei Corporation a payment technology partner, today announced that they have entered into a definitive agreement to acquire Mazooma Technical Services, Inc., a US-focused provider of gaming and sports betting payment technology, for $56 million in additional consideration, subject to certain performance criteria over a maximum three-year period and a closing date for a maximum of $31.5 million. Approximately 24% of the total amount will be paid by issuing subordinated voting rights, with the remainder in cash. The agreement is subject to prior approval by the Toronto Stock Exchange and customary closing conditions and is expected to close in the second quarter of 2021.
One of the most important market advantages that Mazooma has over other payment processors is its ability to process payments in a difficult banking environment for the gambling industry. Although a growing number of states have legalized online gambling, payments remain a challenge, and banks are reluctant to handle such transactions. Credit card companies are reluctant to deal with online gambling providers because of regulatory and fraud concerns.
The company was founded in 2009 and claims to be the only licensed betting platform in the United States. The site includes a number of horse racing betting websites, online sports betting, online casinos, and much more. The company acquires payment processing licenses in states with legal online sports betting and gambling.
Both Safecharge and Nuvei offer comprehensive payment solutions to their customers. Although they are not operating in the same industry or jurisdiction, many of their technologies appear to be similar. For example, Nuvvei mentioned Safecharges’ risk management capabilities in its statement announcing the acquisition. However, this does not necessarily mean that Nuvei offers exactly what Safe Charge does. However, their focus is on a different type of customer, which means that the Safecharages technology is in no way superior to Nuveis.
And herein lies the simple and expensive problem for companies operating in saturated markets. You can spend a lot of money to expand into new markets and business areas, but you can also spend a lot of money to buy companies that are already successful in these areas. With Safecharge, Nuvei has to deal with two companies that do not have the same vertical or judicial jurisdiction.
The company, founded in 2006 by Israeli billionaire Tedi Sagi, announced on the second day of the Cyprus event that it had acquired Canadian company Nuvei for $890 million. The deal is said to have brought in a whopping $600 million.
In September 2020, payments company Nuvei Corp. completed the largest tech IPO on the Toronto Stock Exchange, generating gross proceeds of $80.5 million. The company was granted permission to serve the sports betting industry in Colorado, Indiana, and West Virginia. In December 2020, Scores Media Gaming, Inc., which operates its own digital sports media and sports betting products, entered into a buyout deal with gross proceeds of $40 million. The net proceeds will be used in part for the growth and expansion of the scores sports betting applications and activities in the US and Canada.