Amaya Gaming Seeks to Acquire Cryptologic
Large Canadian gambling company, Amaya Gaming has announced that it has put in a preliminary cash offer to acquire Cryptologic, a leading Irish/Canadian online casino software provider.
Amaya Gaming, which already owns 7% of existing shares in Cryptologic, made a bid to buy the remaining 93% of Cryptologic shares this week. It offered to pay $2.50 a share, which is a premium of 52% over the group's closing price of $1.64 on the New York Stock Exchange last week, and an offer the Board of the software giant will unlikely turn down.
A statement issued by Cryptologic read: "The Board of Cryptologic, a developer of branded online betting games and internet casino software, has agreed in principle the outline terms of possible recommended all cash offer from Amaya for the acquisition of the entire issued and to be issued share capital of Cryptologic at $2.50 in cash per common share."
Analysts put Cryptologic's value at $34.5 million, and Amaya has agreed to pay $32 million for the 93% it wishes to purchase.
In March this year, Amaya Gaming announced that it was beginning a strategic review of Cryptologic in order to acquire more than the 7% it already owned.
In 2010 Cryptologic was forced to let 47% of its staff go, and declared major restructuring in order to reduce its cost base. As a result, the company recently announced its first surplus since 2008, with $500,000 in profits in the second half of 2011.
The company develops branded gambling games and internet casino software, especially movie-themed games and superhero slots such as its winning Marvel Comics series of video slot titles.
Cryptologic supplies its games to top online gambling companies in the industry, such as Paddy Power, Betfair and Ladbrokes.
Cryptologic Acquisition Subject to Preconditions
Both Amaya and Cryptologic stressed this week that Amaya Cryptologic acquisition was preliminary only, subject to several preconditions.
One of the preconditions is that Cryptologic's company board gives its unanimous support of the buyout, and another is that Amaya Gaming proves that it has the money and assets to enable it to complete the purchase of 93%.
Amaya has until January 12th to make a firm offer to purchase Cryptologic or to confirm that it does not want to go ahead with the preliminary offer.
It is important to note that Amaya is in the process of being sold to Canaccord, the Canadian investment bank at a price of €15 million.
