The Ottawa-based company that powers digital 50-50 draws for the Senators Community Foundation and other charities in the province says its pending acquisition of another Ontario firm will be its ticket to expansion across North America.
Canadian Bank Note announced Monday it has agreed to acquire Toronto-based Bump Worldwide – a prominent player in the digital raffle space that works with high-profile clients such as Major League Baseball’s Chicago Cubs – from U.K. firm Sportech PLC.
The transaction, which is expected to close in the second quarter pending regulatory approval, is valued at $10 million. The deal could be worth an additional $2 million if Bump hits certain earnings targets.
While not a massive transaction from a purely financial perspective for a company of Canadian Bank Note’s size, it’s nonetheless a significant move for the firm.
The company best known for printing currency, passports and driver’s licences has been making headway in the digital charity gaming technology sector since the Ontario Lottery and Gaming Corp. first selected it to help modernize charity fundraising efforts seven years ago.
More than 100 customers
CBN now makes the software that runs online 50-50 raffles for heavy hitters such as the charitable arms of Maple Leaf Sports and Entertainment and the Toronto Blue Jays.
Acquiring Bump elevates CBN into a whole new league in the charity space. The Toronto firm has more than 100 customers in Canada and the U.S., including the charities affiliated with high-profile sports franchises like the Cubs, Chicago Blackhawks, Las Vegas Golden Knights and the San Francisco 49ers.
“It was a natural fit for us to grow the business overnight,” Kirk Arends, the head of business development for CBN’s lottery and gaming division, told OBJ on Monday, adding he first put out feelers about a potential deal to Sportech execs last summer.
“We were looking for strategic ways to grow our raffle business. That’s what they do. They’ve got a good technology base, they’ve got great employees and their culture fit very nicely with the way we like to do business. It was an easy decision to make for us.”
With many charities struggling to bring in donations during the pandemic, Arends said a growing number of organizations are shifting to online fundraising in a bid to generate more revenues. Meanwhile, jurisdictions that previously forbid the practice are reconsidering their stance as charities scramble to replenish lost income.
"The online space for raffles is greenfield in many jurisdictions. There’s a lot of room for growth here."
“The online space for raffles is greenfield in many jurisdictions,” he said. “There’s a lot of room for growth here.”
Canadian Bank Note’s decision to acquire Bump is just one more step in the 125-year-old company’s ongoing efforts to diversify its operations.
CBN now has more than 1,700 employees worldwide, including 900 in Ottawa. While much of its business still comes from printing legal tender for more than 30 countries, including Canada and New Zealand, CBN also prints a variety of other secure documents such as passports and driver’s licences for governments around the world.
Three decades ago, the firm branched out into the gaming space when it began providing lottery terminals and related equipment for governments in Caribbean countries such as St. Lucia. Today, it oversees national lottery operations in nine jurisdictions in the Caribbean and Central America.
That expertise helped pave the way for CBN’s entry into the emerging digital gaming sector. Buying Bump makes it even more of a force to be reckoned with.
“We got very good at it over the years,” Arends said. “It turned out to be a very good decision on our part.”