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JPJ takes a gamble on Gamesys
Posted on Thursday, 13 June 2019 11:59
JPJ is acquiring the business of Gamesys Holdings, excluding sports brands and games, for a total GBP 490.00 million to diversify its portfolio and create a platform for international growth in an evolving global gaming sector.
The deal comprises GBP 250.00 million in cash and 33.70 million newly-issued consideration stocks worth GBP 240.00 million and that represent some 31.0 per cent of the resulting enlarged entity.
It represents an estimated multiple of 7.3x adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) for the 12 months to 31st December 2018.
On a pro forma basis, the enlarged company, which will be named Gamesys Group plc, will have net leverage multiple of 3.1x (net debt: GBP 524.00 million; adjusted EBITDA: GBP 171.00 million).
According to the statement, the combined JPJ and Gamesys business should qualify for inclusion in the FTSE 250 and will benefit from greater operational control through proprietary technology and a strong financial profile.
Gamesys is a developer of platform software and bingo games for, and an operator of, real money online gaming websites and apps.
The group provides real money online slots, casino, bingo, poker and instant win games to end users on a business-to-consumer basis in the UK under the websites and apps branded Virgin Games, Heart Bingo and Monopoly Casino.
It also has a partnership with Tropicana in New Jersey, US under the label Virgin Casino, which is only available to players in the state and the site is operating using a brand licence with Virgin Enterprises.
Gamesys booked revenue of GBP 163.30 million in the financial year ended 31st March 2018 (FY 2017: GBP 100.00 million; FY 2016: GBP 59.00 million), and GBP 139.70 million in nine months to 31st December 2018.
Adjusted EBITDA advanced by a compound annual growth rate of 60.0 per cent over the same three years, to GBP 56.00 million by FY 2018.
Reunited Target Newco is the official holding company of all the assets and liabilities of Gamesys and will need to undergo a reorganisation prior to the completion of the acquisition.
The deal does not include the Virgin Bet branded sports betting business and the recently acquired Livescore sports data and media operations.
Gamesys’ non-bingo studio and supply operations, a minority equity investment in a Norwegian games technology company and an investment in a US sports betting entity are also excluded from the acquisition.
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