The latest news in the world of mergers and acquisitions is that the UK gambling giant William Hill is reported to have teamed up with NYX Gaming Group in order for them to buy OpenBet. The rumored price put on the betting technology developer is $300 million. This comes right after the UK betting operator has announced its withdrawals from the process to remain the Football Association’s “official betting partner”. The FA tripled the cost of the deal to an estimated £2 million a year.
OpenBet has over 15 years of experience in the field of developing gaming platforms with customers including PMU in France, Danske Spil in Denmark and BCLC in Canada. Currently, the company is owned by Vitruvian Partners. They were bought out back in 2011 for £208 million. There have been reports of Morgan Stanley being appointed to handle the potential sale, though those have not been confirmed by officials from either of the parties involved.
NYX Interactive is Stockholm based. The company was established in 2006 and today offers a number of operating systems for casinos and other online games. The group develops, operates, and manages a rather huge portfolio of online games, including casino, bingo, poker, sports betting, and lottery. In late 2011 they became part of the NYX Gaming Group with their acquisition of one of the leading online games developers – NextGen Gaming (based in Sydney, Australia).
Another titan in the field – Playtech – is expected to enter the game as it is already one of the main players in the industry. This is likely the reason for William Hill to be giving NYX a shoulder – bookies are not fans of the idea of Playtech dominating the market more than it already does. Something that will certainly be more the case if they were to win OpenBet over.
The potential joint venture of William Hill and NYX comes after a recent row of mergers on the British gambling market – Coral & Ladbrokes, Betfair and Paddy Power – it seems to be the going trend. William Hills even made an offer of £744m to buy out competitor 888 Holdings but the offer was rejected by the shareholders. We all know the benefits of mergers and acquisitions, so none of this comes as a surprise.
We have hunted down some expert’s opinions on the topic to shed some light on the overall feeling about the possible acquisition. David Jennings (analyst at Davy Research, Ireland’s leading provider of wealth management, asset management, capital markets and financial advisory services) believes that from investor’s viewpoint, the market cannot be convinced by the strategic benefits of the merger – the numbers still have to be right, guaranteeing steady returns. Something that is not the case as we speak.
Wawrick Bartlett from Global Betting and Gaming Consultants is more concerned with the fate of existing OpenBet members. “The current customers of the OpenBet sports book will have concerns that if ownership fell into a competitor’s hands, they may lose some integrity over customers’ data.”. He is also supporting the point that from financier’s standpoint there are things to be cleared before the deal can potentially go ahead. Anyone with a background in the gambling industry would know though, that things here are not always done for profit. Limiting the reach of Playtech might prove a good enough reason for the bookmaker to proceed with the acquisition regardless of fiscal benefits (or the lack of such).