XLMedia's Share Price Climbs Following News of North America Operations Divestment

October 21, 2024 03:25 AM PDT | By Team Kalkine Media

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XLMedia's Share Price Climbs Following News of North America Operations Divestment — Image source: Shutterstock

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Highlights

XLMedia PLC shares surged 39% following the announcement of a proposed $30 million divestment of its North America business to Sportradar.

The North America division generated $27.5 million in total revenue and $5.5 million in adjusted EBITDA for the last financial year.

Following the divestment, XLMedia will operate as a cash shell, having previously divested its European and Canadian operations.

Shares of XLMedia PLC (OTC:XLMDF) experienced a substantial increase of 39% on Monday, following the company's announcement regarding the proposed divestment of its North America business. The company has entered into an agreement with Switzerland-based sports data firm Sportradar for a transaction valued at $30 million, contingent upon approval during a general meeting scheduled for November.

In the last financial year, XLMedia's North America operations reported total revenue of $27.5 million and an adjusted EBITDA of $5.5 million. This move aligns with the management's strategic review, which concluded that the market was not fully recognizing the value of its individual business segments, prompting the decision to divest its core operations.

Following the completion of this divestment, XLMedia will transition into a cash shell, a status it shares with its recent divestitures of European and Canadian operations. The strategic shift aims to enhance shareholder value and reflect the true worth of the company’s remaining assets.

XLMedia's share price saw a doubling in March when it first announced the divestitures of its European and Canadian units, contributing to an impressive year-to-date increase of 76% in its stock value. The management's focus on optimizing its portfolio and streamlining operations has resonated positively with shareholders, resulting in a significant market response.

As the company prepares for this transition, it remains focused on the implications of becoming a cash shell, exploring new avenues for growth and strategic opportunities in the sports and gaming digital media landscape. The upcoming general meeting will be pivotal in determining the future direction of XLMedia following the proposed divestment.

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