The BetMakers Technology Group Ltd (ASX: BET) share price has returned from its trading halt and is shooting higher on Wednesday.
In afternoon trade the betting technology company's shares are up 12% to a record high of 75 cents.
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Why is the BetMakers share price shooting higher?
Investors have been fighting to get hold of the company's shares today after it received firm commitments for an equity raising to fund a major acquisition.
According to the release, BetMakers has received commitments to raise $50 million by way of a placement to fund the acquisition of the assets of leading international online sports betting company Sportech PLC for A$56.2 million.
BetMakers is raising the funds through the issue of 83.3 million new shares at 60 cents per share.
BetMakers' Managing Director, Todd Buckingham, commented: "BetMakers welcomes the strong support of institutional and sophisticated investors, both existing and new, in the Placement. We also look forward to conducting a Share Purchase Plan offer as an opportunity for all existing shareholders to participate."
Why is BetMakers acquiring the assets of Sportech?
This acquisition is intended to accelerate BetMakers' international growth plans and significantly expand its global customer base and strategic position to fully capitalise on emerging opportunities in the U.S. market.
This is particularly the case with fixed odds wagering, which management sees as a key driver of growth in the future.
Management advised that the acquisition is expected to deliver substantial revenues and earnings before interest, tax, depreciation and amortisation (EBITDA) for the BetMakers' business.
On a pro-forma basis for FY 2020, the Tote and Digital Business combined with BetMakers' existing operations would have delivered A$56.1 million revenue and A$7.7 million EBITDA. This compares to the stand-alone revenue of A$9.2 million and EBITDA of A$0.8 million BetMakers recorded in FY 2020.
Mr Buckingham commented: "This Acquisition will supercharge our entry into the U.S. and position the Company for substantial growth on the back of the emerging wagering opportunities in U.S. racing, including Fixed Odds, where we believe we are well placed."
