Codere, a Spanish multinational company leader in the private gaming sector, has reached a merger agreement of Codere Online (its online gaming subsidiary set up by the parent company Codere Online Luxembourg, SA, Servicios de Juego Online SAU and its consolidated subsidiaries) with Spac Dd3 Acquisition Corp. II, approved today by its Board of Directors. This merger will result in Codere Online, valued at $ 350 million, becoming a public limited company, listed on the US Nasdaq stock market. The new company will be majority owned by Codere, which maintains the management of the new group.
“Our company celebrates this agreement, which provides the online business with sufficient resources to reach the growth potential offered by the Latin American market, and reflects the value we have generated over the past three years by promoting this division,” explains Vicente Di Loreto, CEO of the Codere Group. . For his part, Moshe Edree, general manager of Codere Online, explains that “we are delighted to partner with Dd3. This agreement brings together the renowned Codere brand and our deep experience in growing online gaming businesses with a world-renowned sponsor such as DD3. , who has a proven track record of building business through a team of experienced investors. With the listing and new capitalization, we will be in an excellent position to leverage our online business in our major countries of Spain, Italy, Mexico, Colombia and Panama, as well as in the city of Buenos Aires, where we hope to start operating at the end of 2021, to drive our expansion into other high-growth Latin American markets. “
In this way, Codere Online wants to take as a basis its business model in Spain and Mexico to promote development in other markets in which it is already present, such as Colombia, Panama or in the city of Buenos Aires, as well as being a pioneer in those regions where the activity could soon be regulated, such as Brazil, Chile, Peru, Uruguay or other regions of Argentina, analyzing the options to access the Hispanic online gaming niche in the United States.
Martin Werner, founding partner of DD3 Capital Partners, adds: “We are thrilled to partner with Moshe and his team to bring Codere Online to market. Codere’s omnichannel presence, coupled with the growing potential market and limited competition from other global gaming operators, give Codere Online a unique advantage in its expansion into Latin America ”.
The agreement reached values the online branch at approximately $ 350 million in company value, or 2.3 times the estimated turnover of Codere Online in 2022, of approximately $ 150 million. Four institutional investors (DD3 Capital Partners Baron Funds, MG Capital, and LarrainVial) commit through the signed agreement to make a $ 67 million investment, which will close immediately prior to the online transaction, and Baron Funds has committed to maintain a position of 10 million US dollars in Spac shares, obtaining a minimum trading fund of 77 million dollars. Additionally, DD3 has $ 125 million in its trust account, which along with private investment will be used to finance marketing expenses, improve platforms and technologies, and expand into new, fast-growing markets. The respective governing bodies of Codere and DD3 have approved this agreement so that the proposed merger can be completed in the fourth quarter of 2021. Further information on this agreement is available at www.sec.gov and in the investors section of the Group’s website Codere https://www.grupocodere.com/accionistas-inversores/, as well as on the Codere Online website www.codereonline.com.
The Codere Group continues with the financial restructuring process started in April This important operation does not involve any change in the company restructuring process communicated to the market in April due to the serious liquidity problems that the group is going through due to the pandemic. The liquidity generated by this operation will be mainly invested in Codere Online. The rest of the group will be able to receive only up to a maximum amount of 30 million dollars and this is subject to compliance with certain conditions. On the other hand, the evaluation obtained for our online business is not an adequate reference for the rest of our present assets or activities. The group will continue to report on the restructuring process as significant milestones occur and reminds that Codere SA will see its stake in the new consolidated group reduced to 5% (and, in addition, will receive warrants that will entitle up to 15% of the capital to certain conditions) as described in the relevant restructuring communications. Once the restructuring operation is finalized, the company plans to proceed with its liquidation, thus losing its listed status.