Jumbo Interactive expands in UK with Dream Car Giveaways acquisition

The move expands Jumbo Interactive’s presence in UK prize draw market.

UK.- Jumbo Interactive’ UK subsidiary has completed its acquisition of Dream Car Giveaways (DCG) following satisfaction of all conditions. The move expands its presence in UK prize draw market, where customers can participate to win prizes, such as cars, cash, property and lifestyle products.

Jumbo said acquisition of DCG is aligned with its strategy to accelerate growth, enhance revenue and earnings diversification, and expand its presence in international markets, establishing a direct-to-consumer footprint in the UK. It said DCG has a proven business model, a strong growth trajectory and attractive financial returns. The acquisition also provides an opportunity for Jumbo to leverage its technology, marketing and operational capabilities to support DCG’s growth, the company added.

The current DCG management team will remain in place with the three directors and founders continuing to lead the business through the earn-out period ending December 31 2026. They will report into Tam Watson (Head of Operations – UK) and performance will be reported separately in the Group’s financial results

Jumbo managing director, CEO and founder Mike Veverka said: “DCG has become a trusted leader in the UK’s B2C prize draw sector, which is meeting the rising demand from younger, internet-savvy consumers seeking unique products in an engaging digital format. Jumbo’s two decades of B2C success in Australia and its world-class software, marketing, and customer management expertise, provides DCG with the foundation to continue its already impressive growth.”

DCG Director Marcus Hickling said: “With ongoing changes in technology and increased competition in the prize draw space, I’m pleased that DCG will be part of Jumbo – a recognised global leader in digital lotteries and managed services, and a strong, culturally aligned partner. I look forward to working closely with the Jumbo team in the next phase of growth for our business.”

Jumbo will acquire DCG for an enterprise value of £53.9m comprised of upfront cash of £36.9m, an equity component of £5m)m and an earnout payment of up to £12m payable post December 31 2026, subject to achieving certain revenue growth and earnings hurdles. Based on adjusted EBITDA of £8.3m for the 12 months ended 30, the enterprise value represents an acquisition multiple of approximately 6.5x adjusted EBITDA.

Jumbo will fund the transaction via a combination of £8.8m in existing cash, the issuance of £5m in new shares and the draw down of £40m in debt under an upsized and amended debt facility with its current lender. The enhanced facility provides greater funding capacity and increased flexibility.

In its last full financial year, DCG generated £57.9m in Total Transaction Value (TTV) and £17.9m in revenue. The acquisition is expected to deliver double-digit earnings per share growth in the first 12 months post-completion.

Controversy and voluntary code for UK prize draws

There UK prize draw market has been a source of controversy. The sector is unregulated, with operators not needing to have a gambling licence. Regulated lottery operators see the sector as unfair competition and criticise the sometimes low proportion of revenue that goes to good causes.

The Gambling Commission has recognised that prize draws and competitions (PDCs) may be eating into lottery revenue, and the UK Lotteries Council has been lobbying for to be considered as gambling.

However, in July, gambling minister Baroness Fiona Twycross opted not to impose regulation on PDCs. Twycross announced that only a voluntary code will be introduced for now. This was the option favoured by PDC operators. 

The minister of state for the Department for Culture, Media and Sport told the House of Commons that the voluntary code for PDCs would be introduced this year. She didn’t provide details of what it will cover but said the results will define whether the government decides to introduce legislation further ahead

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