Gamesys Acquired for $650 Million by Intertain Group

Intertain Group Limited, a leading Canadian online gambling operator, recently announced its acquisition of Gamesys Limited, a leading online bingo company and owner of the brand Jackpotjoy, Starspin and BetMania, to an estimated cost of $650 million.

Transaction Highlights

All of Gamesys B2C assets are included in the Intertain Group acquisition. The agreement entitles Intertain to also acquire 100% of the outstanding and issued shares of Target Company which is a subsidiary of Gamesys and all player data assets of Jackpotjoy. This move will likely ensure Intertain Group’s bid to expand its presence in the online gambling industry thus capturing the market for even greater returns for the company.

The acquisition poses a significant growth potential not only in cash flow but also in terms of earnings before interest, taxes, depreciation and amortization (EBITDA). The management of Intertain is very optimistic that Jackpotjoy Business will have a 90% EBITDA to free-cash-flow conversation rate partly based on Jackpotjoy’s high customer retention rates.

Initial Payment Schemes

Intertain Group stated that 13% of the first set of payment will be funded through Intertain Group’s shareholdings. The initial payment to be issued to Gamesys is $56.8 million with a three-year payment plan if the targeted profit is achieved. Gamesys will be given 7,361,365 Common Shares valued at $14.73 per share. These shares are subjected to a year lock-up for all shareholders of Gamesys except for Noel Hayden, CEO of Gamesys, who is subjected to a two year lock-up. The transaction will be partly funded through bought public offering of subscription receipts. It must be noted that Intertain agreed to sell 28 million subscription receipts at $15.00 per share for a gross profit of $420 million to Canaccord Genuity Corp. and a group of underwriters.

Gamesys Limited

Noel Hayden, founder of Gamesys, expressed that Intertain and Gamesys are highly matched as the two companies (now one), share the same vision. Hayden feels confident that the shareholders, players and employees of Gamesys and Intertain are in for a great deal. As Gamesys Founder and CEO, Noel Hayden will sit as one of Intertain Group’s Board of Directors. His capacity will be as a Non-Executive Director.

Intertain Group

John Kennedy Fitzgerald, CEO of Intertain, said that the acquisition is consistent with the company’s vision. It will be able to give more focus on female online players as the company also acquired Gamesys’ community of players. He expressed that they are very happy to have acquired and enter into a long-term relationship with Gamesys.