Sega Sammy to Acquire GAN for $84 Million
Sega Sammy Creation, the company recognised mostly for its influence in arcade and video games from Japan, is purchasing sports betting technology firm GAN Ltd. (NASDAQ: GAN) for approximately $84.4 million.
The takeover values the software provider at $1.97 per share, which represents a 121% premium compared to its closing price on Tuesday. GAN shareholders are set to meet in the first quarter to finalise voting on the transaction, with a possible completion within the fourth quarter of 2024.
In the event the deal is approved by GAN's shareholders and finalised, all outstanding GAN ordinary shares will be acquired for $1.97 each in cash. Subsequently, GAN's ordinary shares will no longer be subject to public reporting requirements under the Securities Exchange Act of 1934, nor will they trade on any market. Following the conclusion of the merger, GAN will be a fully-owned subsidiary of SSC, according to a statement.
GAN's board of directors formed a distinct committee, consisting only of independent directors, to consider and negotiate the offer. The gaming technology company was insured by investment bank B. Riley.
Sega Sammy Acquires GAN Stops its Downward Trend
Established in the UK, GAN first entered the US market three and a half years ago, as the sports betting stock sector garnered significant interest from the investment community.
During this time, the fervour for sports wagering stocks was at a peak, causing GAN to price its initial public offering (IPO) at $8.50 and experiencing trading at $13 on its inaugural day. The stock steadily increased, reaching $32 per share in February 2021. However, from that point on, a prolonged decline occurred which culminated in Tuesday's closing price of 89.1 cents. Over the past 12 months, GAN's value has decreased by 43.91%.
"GAN, previously known as GameAccount Network, supplies enterprise SaaS solutions for online casino gaming and sports betting applications; in particular its GameSTACK internet gaming platform," as stated by Renaissance Capital, a renowned IPO research firm.
Sega Sammy's plans for GAN are yet to be revealed. At present, the Japanese company has no direct presence in the regulated North American sports betting market. However, this segment is extensively technology-driven.
GAN Sale Predictable
There's nothing astounding about GAN's sale. Earlier this year, the Irish company announced a strategic review to assess options that could expedite its route to better profitability metrics and a more appealing return profile. These reviews generally lead to sales.
Moreover, the sale to Sega Sammy is not surprising due to Sega Sammy taking over a term loan from GAN's creditor, Beach Point Capital. Under this agreement, Sega Sammy provided GAN with lower-interest credit.
"After considering various avenues for generating value, we are happy to have concluded this agreement with SSC," said Seamus McGill, interim CEO of GAN in the statement. "The increased competition in the highly concentrated US B2C space, a delayed adoption of regulated online gaming in the US, and changes to key customer contracts make the near-term business environment challenging without ample capital resources. Sega Sammy possesses such resources and GAN provides a strong addition to their existing gaming portfolio. We believe this all-cash offer, at a substantial premium to prevailing trading prices, will maximise value for our shareholders."
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Source: www.casino.org
