GAN secures $30M investment from Beach Point; announces $5M share repurchase, cost control implementation

Investment manager Beach Point Capital Management LP announced last Thursday a $30 million private credit investment in B2B gaming technology provider GAN Limited. Beach Point’s investment is set to help GAN develop proprietary gaming content, facilitate new B2B contracts, and expand into new markets.

"GAN is at the forefront of online gaming and sports betting technology and we're excited to support their expansion," said Brian Himot, Portfolio Manager at Beach Point. "Innovative firms like GAN will continue pushing the limits of gaming technology and we are committed to being a part of that."

GAN operates a North American B2B technology offering for real money internet gaming solutions and an International B2C operation for internet casino and sports betting. It has developed a proprietary internet gambling enterprise software system, GameSTACK, which it licenses to land-based US casino operators as a turnkey technology solution.

GAN Provides Strategic Update and Announces Successful Completion of $30 Million Term Loan https://t.co/A20AwlyWZj $GAN

— GAN (@GameAccountNtwk) April 28, 2022

"This transaction enhances our ability to invest in market-leading technology and create shareholder value," said Dermot Smurfit, Chief Executive Officer of GAN. "The Beach Point team has a deep knowledge of our industries and we are pleased to work with them on furthering our mission for years to come."

On the same day, GAN provided a strategic update. The company said it is poised for the near-term opportunistic implementation of a previously announced $5 million share repurchase authorization following public disclosure of first-quarter results, which is slated for May 16.

The business further said it has recently begun implementation of cost controls, along with other strategic initiatives that are expected to accelerate Adjusted EBITDA generation and improve profitability. It also announced that Coolbet’s hold, or sports margin, for the first quarter improved sequentially and was within the historically normalized range of approximately 7%.

GAN Schedules 2022 First Quarter Financial Results Conference Call for May 16, 2022 https://t.co/8nd5MVDDpn $GAN #iGaming #Earnings #Finance pic.twitter.com/qaT7R45YIR

— GAN (@GameAccountNtwk) May 2, 2022

“These actions reflect the Company’s commitment to driving growth, improving profitability, and maintaining a well-capitalized balance sheet,” a statement reads. “This new capital will be focused on funding existing high-return B2B investments and future opportunistic investments, including opportunistic execution of the previously announced $5 million share repurchase.”

“Today’s announcement ensures that we have the capital available to drive improved shareholder returns going forward,” said Karen Flores, Chief Financial Officer of GAN, on Saturday. “The incremental flexibility provided by the term loan allows us to execute our balanced capital allocation plan centered around investing in our B2B offering, growing Coolbet and our B2C presence, and returning capital to shareholders during a time when we believe our share price undervalues the long-term opportunities we have ahead of us.”

“We are simultaneously taking steps to accelerate our path to improved Adjusted EBITDA generation and profitability as we are acutely focused on our margin profile and efficiency measures,” she concluded.