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Bally’s Corp Stakes a $2.8 Billion Wager on Gamesys Group
By Jeff Osienya Mar 28, 2021 IndustryBally’s Corp and Gamesys Group agree on a merger acquisition deal worth $2.8 billion. The two brands will leverage each other’s resources and expertise to benefit from the fast-growing gaming sector and create one of the biggest gaming entities globally.Bally’s Corporation, one of the leading gaming companies in the USA announced that it will be acquiring Gamesys Group, an equally prominent UK-based online gaming brand, for $2.74 billion (£2bn). The two companies disclosed their plans to join forces on Wednesday after the boards of both parties came to a definitive agreement a day before and submitted an 8-K regulatory filing with the Securities and Exchange Commission (SEC).
Per the merger proposal, Bally’s Corp will be buying all Gamesys outstanding shares at $25.37 (£18.50) apiece. This arrangement effectively put the value of Gamesys at about $2.8 billion which is nearly 40% higher than what its share price was late in January when the two gaming juggernauts first started discussing their merger.
Moreover, compared to the same period last year, Gamesys’ share price has soared by a whopping 150%. This exponential surge is attributed to the increased popularity of online gaming as a result of forced lockdowns introduced for the better part of 2020 to curb the spread of the novel Coronavirus. For the whole of 2020, the UK gaming bigwig recorded almost $1 billion in revenue and an adjusted EBITDA of $300 million.
In a joint announcement after the SEC filing of the forthcoming merger, the two companies revealed the motivation behind their move saying that:
Quote“The Gamesys board and Bally’s board believe that the possible combination has a compelling strategic and financial rationale, would create long-term value for both Gamesys and Bally’s, and would be consistent with Bally’s Gamesys’ respective long-term growth strategies,”
Further, the SEC statement also indicates that the shareholders of Gamesys will have the option to exchange their current shares for those of the newly merged company at a 0.343 rate. Effectively, the individual interests for this transaction part for shareholders will be about $2.30 per share.
A Win-Win for Bally’s and Gamesys
According to the terms of the deal, the combined entity will maintain the ‘Bally’s Corp’ brand name and the company headquarters will remain in Rhode Island. Bally’s Corporation listing on the New York Stock Exchange will also stay as it is with the ticker symbol BALY.
After the official announcement, Bally’s released a statement to underscore the importance of the new arrangement with Gamesys as follows:
Quote“Gamesys would benefit from Bally’s fast-growing, land-based and online platform in the United States, providing market access through Bally’s operations in key states, as the nascent iGaming and sports betting opportunity develops in the US.
Bally’s would benefit from Gamesys’ proven technology platform, expertise, and highly respected and experienced management team across the online gaming field. The combined group would be well-positioned to capitalize on the full range of opportunities present both in the US and beyond”
It’s worth noting that Gamesys has already been having a presence in the US market, although a relatively small one, where it operates Virgin Casino and New Jersey’s Tropicana online casino. The takeover bid is thus a chance for the Jackpotjoy and Virgin Games owner to have a crack at a much bigger chunk of the USA’s lucrative gaming market.
Gamesys current Chief Executive, Lee Fenton also chimed in, voicing his pleasure in his company’s merger acquisition agreement with Bally’s by saying:
Quote“From our first meeting to now it has been the entrepreneurial energy of the two businesses that has brought us to the edge of creating a uniquely powerful company. Our shared passion and vision to capitalise on technology disruption to better serve our customers, wherever they may be, should make for an exciting journey for our employees, customers and shareholders alike.”
After completion of the union, Lee Fenton will assume the role of Chief Executive Officer of the merged company and two of the current Gamesys directors will join the board of the new Bally’s.
Bally’s Continues with its Merger & Acquisition Spree
With this new acquisition, Rhode Island-based Bally’s is looking to expand its digital footprint further in the rapidly growing US gaming market. So far in 2021, this is the third merger and acquisition deal that the company has sealed.
Last month, Bally’s moved to acquire Monkey Knife Fight, the third-largest Daily Fantasy Sports operator in North America, to grow its sports betting portfolio. A month before, in February, the company also acquired SportCaller, a B2B F2P provider that will help it ramp up its player engagement. The Rhode Island-based company has also recently made a $100 million offer to acquire Allied eSports to bolster its range of sports-related services.
While the Allied eSports deal is yet to materialize, Bally’s recent merger and acquisitions spree seems to be sending a strong competitive message to other gaming brands like Caesars Entertainment, Draftkings, Flutter Entertainment, and Entain PLC. Bally’s is surely readying itself to take advantage of the recent global gaming expansion across different verticals and it will stop at nothing to get its share of the pie.
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