Intertain to acquire Vera&John in 89m deal
Canada-based group enters into non-binding letter of intent with Malta-based casino operator for up to 89.1m
The Intertain Group has agreed a deal to acquire the online casino firm Vera&John for up to 89.1m (CA$126.1m).
The Toronto-based gaming group has entered into a non-binding letter of intent with Vera&John’s Malta-based parent company Dumarca Holdings for an initial payment of 44.5m in cash and 36.5m in common shares, with additional earnouts payable depending on Vera&John’s performance in 2015 and 2016.
Although the maximum consideration for the deal stands at 89.1m, the sum will be based on earn outs dependant on Vera&John hitting certain EBITDA targets over the next two financial years.
Should Vera&John’s EBITDA exceed 10.1m in both 2015 and 2016, Intertain will make additional payments to Dumarca Holdings of four times that amount up to a cap of 8.1m.
Vera&John, which was founded in 2011, has experienced rapid growth in its core Nordic markets and 2013 EBITDA stood at 4.6m from net gaming revenue of 25.9m.
Intertain said the casino operator is being acquired on a debt-free basis with funding coming through a combination of cash-on-hand and its own debt warrants.
The acquisition is expected to complete in December this year after it has completed due diligence and the settlement of definitive documentation, and the deal will also require certain regulatory approvals.
“Vera&John provides immediate accretion and meaningful operating cash flow to our business and gives us access to the growing Nordic markets,” John Kennedy FitzGerald, CEO at Intertain, said.
Vera&John operates in 11 countries worldwide and has a growing Asian-facing business, but derives approximately 75% of its business from the Nordic region, an area Intertain’s previous acquisitions have yet to enter.
FitzGerald also said the acquisition would also provide the firm “future flexibility” with respect to its operations as it will also obtain Vera&John’s proprietary casino software, as well its mobile casino platform and apps.
Dumarca Holdings director Dan Anderson revealed the firm had reviewed alternatives to the sale prior to the agreement, but “felt Intertain was the best partner” given its “exciting growth prospects”.
Intertain acquired bingo brand owner Mandalay Media for £60m in June and revealed it was looking to make a second acquisition this year while briefing investors after the group’s Q2 financial results in August.
Speaking exclusively to eGaming Review last month, John Kennedy FitzGerald said the group was in discussions with around four companies as it plotted an expansion into new verticals and an aggressive M&A drive, stating that it had become easier to access capital from the investment community since Amaya’s purchase of the Rational Group.