GTECH makes £18m Probability bid
Gaming supplier looks to boost mobile offering after agreeing price of 50p per share for London-based developer
International gaming supplier GTECH looks set to acquire mobile gaming company Probability after making a cash bid of 50p per share, valuing the company at around £18m.
The deal will see GTECH acquire the entire issued share capital of the company, with Probability becoming a wholly-owned subsidiary.
Directors of the London-based firm owning an 11.3% stake in the company have unanimously agreed to vote in favour of the deal and the acquisition has also been backed by shareholders holding a further 43.5% stake.
Any deal is not expected to be completed until April and is subject to conditional approvals from authorities in Gibraltar, Italy and Great Britain.
“This acquisition is a significant step in GTECH’s ongoing efforts to meet the mobile gaming needs of our WLA and commercial customers. The combination will generate operational synergies, primarily in R&D and games development,” Renato Ascoli, president of products and services at GTECH, said.
Probability CEO Charles Cohen said the deal is in the best interests of Probability’s shareholders, employees and customers.
“By becoming part of the GTECH Group, Probability will be able to leverage its technology, mobile expertise and customer relationships on a global basis,” Cohen said.
GTECH and Probability share a common focus in Italy’s gaming market, with Probability revealing last month that it planned to launch a white label offering in the country after witnessing net gaming revenues soar by 36% sequentially.
GTECH’s most recent financial disclosures show the company’s Italian business contracting slightly, with Q3 revenues from the country down 3% year-on-year to 398m despite lotteries and sports betting both reporting favourable results.
The UK firm also has a B2B presence in the Italian market under its Playyoo SA subsidiary, which is located in Lugano, Switzerland.
Probability’s B2B business provides white-label managed services and platforms to egaming operators in both the UK and Italy, supplying content to firms including William Hill, Paddy Power, 888 and the Rank Group.
The acquisition price places a 58.7% premium over the company’s closing share price of 31.5p on 17 February 2014, and is 37% up on the three-month volume weighted average price of 36.5p.
The firm’s share price fell by more than 12p on 19 December 2013 after it reported a 20% fall in net gaming revenues for the six months ended 30 September 2013, having previously traded at between 45p and 48.5p.
Probability’s core B2C business includes the LadyLuck mobile casino brand reported GGR of £2m for the three months ended 31 December 2013.