Amaya Gaming buys PokerStars and Full Tilt in $4.9bn deal

Amaya Gaming is betting that online gambling will take hold in the US with a bold $4.9bn acquisition of PokerStars and Full Tilt.

The Canadian company is buying the larger Oldford Group, the parent of Rational Group, which owns the two poker brands, in cash, creating the world’s biggest listed online gaming group.

In a sign that the industry has joined the mainstream just three years after some industry executives were indicted in the US, Blackstone Group has agreed to participate in the debt financing. GSO Capital Partners, a unit of the US fund, is subscribing for $600m in convertible preferred shares and purchasing $55m of common shares priced at C$20.

Shares in Amaya were up 5.6 per cent at C$19.76 in afternoon trade in Toronto.

Amaya said its presence in regulated markets in the US, Canada and Europe, where it provides software for online and physical lottery operations and casinos, would help it build the poker brands’ presence.

Rational has been waiting more than a year for a licence to operate in New Jersey as the US market opens up.

Washington clamped down on online gambling in 2006, but softened its stance in 2012 and is allowing individual states to license the industry. Only three have so far done so.

PokerStars and Full Tilt have two-thirds of the online market outside the US and 85m registered players.

David Baazov, chief executive of Amaya, said: “This is a transformative acquisition for Amaya, strengthening our core B2B operations with a consumer online powerhouse that creates a scalable global platform for growth.”

Amaya is projecting pro forma adjusted earnings before interest, tax, depreciation and amortisation of $600m-$640m in 2014 for the combined group. It said the transaction valued Oldford at 11.1 times ebitda.

Rational made $420m in adjusted ebitda on revenue of $1.1bn last year. It is based in the Isle of Man, a UK offshore jurisdiction which has a zero rate of corporation tax and minimal betting duty.

Montreal-based Amaya, founded in 2004, said it had secured $2.9bn in bank debt and would raise another $1bn in convertible shares priced at C$24.

Rational, founded in 2001, bought Full Tilt in 2012 as part of a $731m settlement with the US, which had accused the two of violating its laws against online betting.

The fast growth of online poker outside the US in the 2000s – more than 30 per cent a year – is expected to slow to 3.4 per cent a year, according to Amaya. The US market, however, could be worth $2.2bn by 2018.

“This is undoubtedly a seismic event for the online gaming industry but, given the licensing hurdles which await the combined Amaya/Rational Group entity in the US, questions will remain over the group’s avenues for growth in an increasingly challenged global poker market,” said Daniel Stone, head of content at GamblingData, a research group.

Warwick Bartlett, chief executive of Global Betting & Gaming Consultants, questioned whether Amaya could run the business as well as Mark Scheinberg, chief executive of Rational.

Amaya believes it can sell social gaming to Rational’s customers.

The deal is the biggest in the sector since the 2011 combination of Bwin, the Austria-based sportsbook specialist, and UK-based PartyGaming, the FTSE 100 online poker site. Bwin.party has since struggled and its market capitalisation has almost halved.

http://www.ft.com/cms/s/0/abd7936a-f300-11e3-85cd-00144feabdc0.html#axzz3JJmMbDnK

Tai kad čia senos naujienos jau :D

Tai kad čia senos naujienos jau :D

NU