![Raketech Group to Divest Non-Core US Advisory Business for $2.3 Million](/img/breaking.png)
In a strategic move that aims to streamline its operations and enhance its core strengths, Raketech Group has announced the divestiture of its non-core US advisory business for $2.3 million. The transaction, which is expected to close by August 31, will be partially settled at the point of closing and will also include an ongoing revenue share agreement. This decision comes as Raketech seeks to pivot towards areas of higher growth potential within its portfolio.
A Strategic Sale
Raketech's CEO, Johan Svensson, commented on the sale, stating, "This strategic sale is an important step in streamlining our operations and focusing on our core strengths." The sale will result in a non-cash impairment charge of approximately €10 million for the company, a significant financial adjustment that highlights the magnitude of the shift.
Raketech initially entered the US market by acquiring ATS Consultants back in December 2021 for $15.5 million. This acquisition included notable sites such as Winnersandwhiners.com, Statsalt.com, and Picksandparlays.com. Despite this considerable investment, the decision to sell underscores Raketech's focus on long-term sustainable growth and the potential inherent in digitalized subscription and affiliate marketing revenues.
Financial Performance
On the financial front, Raketech has experienced a mixed bag of results in Q2. The company's adjusted EBITDA saw a drop of 17.2%, settling at €5.1 million. Meanwhile, revenue soared by 20.1%, reaching €19 million. However, total operating expenses surged by 47.5% to €17.7 million, a significant increase that has put pressure on the bottom line. As a result, the net profit plummeted by 93.8% to a modest €174,000.
"Despite the one-off non-cash impairment charge, we are confident that this move will enhance our focus, drive improved performance, and deliver long-term sustainable growth and value creation," Svensson noted, expressing optimism about the future despite the current financial challenges.
New Opportunities
In addition to the sale, Raketech has secured an exclusive lead generation agreement, which guarantees a minimum fee of $250,000 over the next 12 months. This agreement is seen as a pivotal step in bolstering the company's digital and affiliate marketing streams.
Svensson elaborated on this strategic focus, saying, "By leveraging our high-quality US operations, our strategy is to maximize the growth potential in digitalized subscription and affiliate marketing revenues and expand our sub-affiliate marketing and partnership revenue streams."
The divestiture and the new lead generation agreement seem geared towards refining Raketech's business model and ensuring its resources are invested in the most promising areas for growth. This move to hunker down on digital and affiliate marketing avenues appears to align well with industry trends, where digital engagement and targeted marketing have become paramount.
Future Focus
As Raketech prepares to publish its Q2 results on August 14, the firm’s stakeholders will likely be keenly observing the impact of these strategic decisions on the company's overall trajectory. The realignment of assets and focus areas aims to shore up Raketech's position in a competitive market, ensuring it remains agile and poised for future opportunities.
Overall, Raketech's decision to divest its non-core US advisory business highlights a clear intent to capitalize on more lucrative, growth-centric opportunities, an approach that industry observers and stakeholders will be watching closely in the months ahead.