Amaya Gaming strikes a deal to acquire poker giant Pokerstars

13 June 2014

From CalvinAyre.com

 

As first predicted on CalvinAyre.com last month, Canadian gambling solutions provider Amaya Gaming Group has struck a deal to acquire online poker giantsPokerStars and Full Tilt Poker for a whopping $4.9b. Rumors of a pending deal had intensified this week as Amaya’s stock surged 17% on Thursday, which followed a 10% gain on Wednesday. 

According to a press release, a wholly owned Amaya subsidiary will pay $4.9b to assume 100% of the issued and outstanding shares of the Oldford Group, the privately held parent company of the Isle of Man-based Rational Group, which controls Stars, FTP and Stars’ live poker tours and events.
 
Oldford shareholders, including CEO Mark Scheinberg, will dispose of their shares to the Amaya subsidiary. Once the transaction is complete, Scheinberg and other Oldford principals “will resign from all positions with Oldford Group and its subsidiaries.” Rational’s executive management team will be retained.
 
The release also mentions some insight into the previously unknown world of Stars’ financial performance. The Oldford Group says it recorded revenue of $976m and $1.1b in 2012 and 2013 respectively, adjusted earnings of $342m and $420m, and cash flow from operations of $267m and $317m.
 
As the press release states, the deal, which is subject to approval from Amaya shareholders, will be financed through “a combination of cash on hand, new debt, a private placement of subscription receipts, a private placement of common shares and a private placement of non-voting convertible shares.” Financial institutions contributing capital include Deutsche Bank, Barclays and Macquarie Capital.
 
It is expected that Baazov will focus on leading Stars and FTP back to US shores, starting with New Jersey, where Amaya is already providing casino services to some of the state’s licensed online gambling operators. How this will go over with Amaya clients like Caesars Interactive Entertainment – which led the (until now successful) campaign to keep Stars from being licensed in New Jersey – remains to be seen.
Stars has a pending online partnership with the Resorts Atlantic City casino and the Division of Gaming Enforcement has left the door open for Stars to be licensed “if significantly changed circumstances are demonstrated.” With the Scheinbergs now out of the picture, the lingering concern over their unresolved Black Friday criminal indictments would appear to no longer apply.
 
As for how it will affect Poker in India and India poker scenario, as mentioned in the key transaction highlights below taken from the press release we should expect  "poker services provided by PokerStars and Full Tilt Poker will be unaffected by the Transaction". We will certainly keep a close eye on developments of this macro deal. 
 
 
 
KEY TRANSACTION HIGHLIGHTS*
 
The Transaction will result in Amaya becoming the world’s largest publicly-traded online gaming company. The online poker platforms PokerStars and Full Tilt Poker are collectively the world’s most popular and profitable online poker brands with more than 85 million registered players on desktop and mobile devices.
 
For calendar year 2013, pro forma combined revenue, EBITDA and adjusted EBITDA1 of Amaya and Oldford Group were $1.3 billion, $474.8 million and $473.8 million, respectively. For 2014, the Corporation is projecting pro forma adjusted EBITDA, assuming the Transaction had been completed as of January 1, 2014, of between $600 and $640 million.
 
The Transaction combines complementary businesses with minimal overlap: Isle of Man-headquartered Rational Group’s B2C poker business including PokerStars, Full Tilt Poker, live poker tours and events, and online and TV poker programming; and Montreal-headquartered Amaya’s B2B interactive and physical casino and lottery gaming solutions.
 
Under the terms of the Transaction, Oldford Group shareholders led by Mark Scheinberg, founder and Chief Executive Officer, will dispose of their shares to a wholly-owned subsidiary of Amaya. Mr. Scheinberg and other principals of OIdford Group will resign from all positions with Oldford Group and its subsidiaries on completion of the Transaction.
 
Rational Group’s executive management team will be retained and online poker services provided by PokerStars and Full Tilt Poker will be unaffected by the Transaction, with players continuing to enjoy uninterrupted access to their gaming experience.
The boards of directors of both Amaya and Oldford Group unanimously approved the Agreement.
 
The Transaction will be financed through a combination of cash on hand, new debt, a private placement of subscription receipts, a private placement of common shares and a private placement of non-voting convertible preferred shares.
 
Affiliates of GSO Capital Partners LP (“GSO”), the credit division of The Blackstone Group (NYSE: BX), have agreed to participate in the debt financing, to subscribe for $600 million in convertible preferred shares, and to purchase $55 million of common shares of the Corporation with each common share priced at C$20 upon closing of the Transaction.
 
An investment manager (the “Investment Manager”), on behalf of its clients, has agreed to participate in the debt financing, to subscribe for approximately $270 million in convertible preferred shares, and to purchase approximately $55 million of subscription receipts.
 
No change related to this Transaction is contemplated for Amaya’s Board of Directors.
 
 
* You can acces the whole official press release HERE
 
 
 


Prominent

Online poker rooms

Khelo365 Khelo365
Bonus: 100% upto Rs 5k

PokerBaazi PokerBaazi
Bonus: 200 free chips

Adda52.com Adda52.com
Bonus: 100% first deposit

PAF PAF
Bonus: 100% up to $500


Media partners