Codere Online, valued at approximately $350m (£251.8m/€294.2m), will continue to be led by its existing management team and Codere Group will maintain majority ownership. In a statement, Codere Group said the listing will progress through a business combination agreement between Codere Online and special purpose acquisition company (SPAC) DD3 Acquisition Corp which has already been approved by the boards of both parties.
Codere Online plans to expand its business model in Spain and Mexico throughout Latin America, focusing on existing markets such as Colombia and exploring new opportunities in Brazil, Chile, Peru, Uruguay, and Argentina. The company is also considering options to access the Hispanic online gambling niche in the US. The proposed business combination, expected to be completed in the fourth quarter of 2021, aims to create the first publicly listed online gaming operator in Latin America.
Vicente Di Loreto, chief executive of Codere Group, expressed pride in the deal and the financial resources it will provide to grow Codere Online. He believes the deal reflects the value created by the business unit over the past three years. The combined company is estimated to have an enterprise value of approximately $350m, with Codere Online projected to generate around $150m in revenue in 2022.
The business combination will be supported by a private investment of over $67m from four institutional investors – DD3 Capital Partners, Baron Funds, MG Capital, and LarrainVial. Additionally, Baron Funds has committed to rolling over approximately $10m of shares in the SPAC. DD3 has $125m of cash available in its trust account, which, together with the private investment, will be utilized for marketing expenditures, technology and platform improvements, and expansion into new high-growth markets.
Moshe Edree, managing director of Codere Online, emphasized the strategic advantages of the deal, bringing together the Codere brand and the company’s expertise in growing online gaming businesses. He expects the new capitalization and the company’s public listing to fuel expansion in core countries such as Spain, Italy, Mexico, Colombia, and Panama, as well as other high-growth Latin American markets. Martin Werner, founding partner of DD3 Capital Partners, highlighted Codere Online’s unique advantage in Latin America due to its omnichannel presence, expansive addressable market, and limited competition from global gaming operators.
Meanwhile, Codere Group, which has faced financial difficulties, continues its financial restructuring process. The group’s revenue was significantly impacted by venue closures in key markets, leading to a 54.3% year-on-year decline. The Codere Online transaction does not imply any changes to the ongoing restructuring process. While the group will see some returns from the deal, they will not exceed $30m. The liquidity generated by the transaction will mainly be invested in Codere Online, with the rest of the group potentially receiving up to a maximum amount of $30m, subject to certain conditions. Codere Group clarified that the valuation obtained for the online business does not reflect the value of the rest of the company’s assets or its retail operation.
