The BetMakers Technology Group Ltd (ASX: BET) share price has started the year in fine form.
In afternoon trade the betting technology company's shares are up over 5% to 70.5 cents.
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Why is the BetMakers share price zooming higher?
Investors have been buying the company's shares this morning after it released an update on its capital raising.
According to the release, the company has completed its placement and raised $50 million (before costs) from sophisticated and institutional investors at $0.60 per new share.
The proceeds received from the placement, in conjunction with existing cash, will be used to fund its acquisition of the racing and digital assets of UK-based online sports betting company Sportech PLC.
In addition to this, BetMakers has revealed that it is also currently negotiating commercial terms with several operators.
And while it is currently unable to determine the materiality of such negotiations, it intends to keep the market informed of such transactions in due course in accordance with its continuous disclosure obligations.
Why is it acquiring the Sportech assets?
The acquisition of Sportech's racing and digital assets are expected 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.
It will also be a huge boost to its earnings. Management revealed that on a pro-forma basis for FY 2020, the assets combined with BetMakers' existing operations would have delivered $56.1 million revenue and $7.7 million EBITDA.
This compares to the stand-alone revenue of $9.2 million and EBITDA of $0.8 million BetMakers recorded in FY 2020.
At the time of announcement, BetMakers' Managing Director, Todd 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."
"The Acquisition would give us a meaningful presence in the U.S., including in 36 of the States and across more than 200 venues, 25 digital outlets and 9,000 betting terminals. It will also greatly expand our global customer base across the UK, Europe and Asia and provides us with an opportunity to expand our product offering at scale in these and other regions," he concluded.
