In one of the biggest business deals in the iGaming industry to date, online gaming giant Gamesys was recently acquired by Intertain in a takeover worth £425.8 million.
On February 5, Gamesys Limited confirmed in a statement on their website that they had sold a number of their assets, including the famed online bingo brand Jackpotjoy, to Intertain in a “long-term services partnership.”
Toronto-based Intertain, who are listed on the Toronto Stock Exchange, have put down an initial payment of £425.8 million, which will fund UK-based Jackpotjoy, as well as Sweden’s Star Spins brand and Spanish firm Botemania. Further payments will be made in the third and fifth years, subject to financial milestones agreed by the two companies.
Without a doubt, the acquisition will effect positive change for both companies. William Moore, Finance Director at Gamesys Gibraltar, said: “The Gamesys Operating Board are delighted to be partnering with Intertain to continue to provide our unique offering to players. We are confident that this exciting partnership will deliver long term growth and together we’ll lead the markets in which we operate.”
The deal will also include a 10-year service agreement, in which Gamesys will provide technical, operational and marketing services for its former brands, which could in turn license specific gaming content for another decade.
With such a lot of money at stake, one has to question the inspiration behind the acquisition. Gamesys CEO Noel Hayden said: “Gamesys and Intertain are a perfect match. From our earliest discussions we shared their vision which we know is critical to a very long term partnership. This is a great deal for Intertain and Gamesys, our shareholders, our employees and our players.”
A perfect match they may be, but was Moore’s decision spurred on by the recent movements of a competitor? In June 2014, it was announced that Amaya Gaming had acquired global online poker brand Pokerstars, in a deal worth $4.9 billion. Amaya Gaming, a relatively “little fish” on the online gambling circuit, astounded officials everywhere when it bought out the biggest online poker brand on the planet.
According to Bloomberg however, $2.9 billion worth of the funds used to acquire PokerStars have been borrowed through bank loans, a potentially risky move on Amaya Gaming’s part.
However, the recent success of the move will doubtlessly have inspired Intertain to make a similar deal. A recent report from the Financial Post revealed that Amaya’s revenue was almost 10 times higher than the $37 million recorded in 2014, which has been attributed to its acquisition of the brand.
Will Intertain see the same success? Certainly Gamesys has an impressive set of B2C brands on offer, including Virgin Casino, which has recently branched out into New Jersey by offering its customers online bingo. New Jersey is one of only three states in North America which currently offers legal online gambling, providing opportunities for huge revenues in the region.
Nine months on from the PokerStars acquisition, Amaya Gaming is thriving, and this savvy decision from Intertain will likely see the same result.
