W H AT ’ S N E X T F O R E G A M I N G ? / C OV E R S T O RY
M& A
A C TI V I TY
01
w BUYING YOUR WAY TO THE TOP REMAINS THE
MOST LIKELY DRIVER OF SHORT-TERM GROWTH
Acquisitions remain one of the simplest and most effective
ways of achieving year-on-year growth, and the likes of
Amaya and Intertain have proved there is significant, and
arguably increasing, investor appetite for the online gambling
sector. Amaya raising nearly $4bn to acquire PokerStars
and Full Tilt was as much a story about the broader financial
picture as one concerning the emergence of a new egaming
power player.
“Money is cheap right now,” one egaming veteran told
eGaming Review. “And it’s very easy for some of these
companies, particularly those in Canada, to raise money for
acquisitions.” Intertain’s recent acquisition of Vera & John
came on the back of a previous deal for Mandalay Media and
took its 2014 spend up to $130m. But Intertain shows no signs
of wanting to play a major role in shaping the future direction
of either Vera&John or Mandalay and it appears what it brings
to the party is not operational excellence, or experience in the
sector, but simply cash.
There is every chance of another Intertain appearing
during 2015 while interest rates remain low and certain global
economies retain a strong financial position. Money may be
harder to raise in Europe for start-ups, but private equity firm
CVC's £720m deal to aquire 80% of SkyBet demonstrates that
private egaming firms remain attractive targets.
And within the existing egaming sector, these kind of
bolt-on acquisitions are also becoming far more common as
attitudes towards consolidation have changed. Operators,
perhaps mindful of the troubles bwin.party has had since bwin
and PartyGaming merged in March 2011, appear to be less
interested in grand strategic moves and more in firms that
can seamlessly slot in alongside the existing business or be
quickly brought into the fold. The way GVC Holdings rapidly
turned around loss-making Sportingbet undoubtedly raised
a few eyebrows and will have got many executives hoping to
W W W. E G R M A G A Z I N E . C O M
replicate the success.
This is a strategy a number of operators could take 2F