![Raketech Group Divests US Advisory Business Amid Shifting Focus](/img/breaking.png)
Raketech Group Divests US Advisory Business Amid Shifting Focus
In a significant strategic shift, affiliate business Raketech Group has announced the divestiture of its non-core US advisory business for $2.3 million. The transaction is slated to close by the end of August, pending all necessary approvals. This move comes less than two years after Raketech acquired the US-facing tipster ATS Consultants for $15.5 million in December 2021, a deal that included popular sites such as Winnersandwhiners.com, Statsalt.com, and Picksandparlays.com.
The new deal will see the transaction settled partially upon closing, with the remaining balance set to be fulfilled through an ongoing revenue share agreement. Despite this strategic realignment, Raketech is set to take a non-cash impairment charge of approximately €10 million as a result of the sale.
Financial Performance and Strategic Recalibration
Raketech's recent financial performance highlights the company’s need to streamline its operations and focus on core strengths. The group's Q2 results, which will be officially published on August 14, indicate an adjusted EBITDA drop of 17.2%, down to €5.1 million. While revenue rose by 20.1% to €19 million, total operating expenses surged by 47.5% to €17.7 million. Consequently, the company's net profit plummeted by a staggering 93.8%, dipping to just €174,000.
Despite these financial hurdles, Johan Svensson, CEO of Raketech, remains optimistic about the company's future. "This strategic sale is an important step in streamlining our operations and focusing on our core strengths," Svensson stated. "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."
Focus on Growth in Digital and Affiliate Markets
The group's decision to divest its US advisory business is aligned with its broader strategy to concentrate on the more lucrative digitalized subscription and affiliate marketing sectors. "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," Svensson added.
Raketech has already taken steps toward this strategic goal by signing an exclusive lead generation agreement. This accord guarantees a minimum fee of $250,000 over the next 12 months, reflecting Raketech's commitment to bolstering its growth in these targeted areas.
Looking Ahead: Strategic Vision and Market Adaptability
The divestiture of the US advisory business marks a pivotal moment in Raketech's evolution. While the company navigates the financial implications of this sale, it aims to refocus resources on areas with higher growth potential, thereby driving value for shareholders and stakeholders alike. The strategic recalibration comes at a time when the landscape of affiliate marketing is rapidly transforming, demanding nimble and decisive action from industry players.
As the company moves forward, industry observers will closely watch how Raketech leverages its existing assets and new agreements to cultivate sustainable growth. With a refocused strategy and an eye on maximizing digital and affiliate revenues, Raketech aims to emerge stronger and more agile in an ever-competitive market. Only time will tell how these strategic moves will shape the company's trajectory in the coming years.