Shares of online gaming company Intertain Group (TSX:IT) are up sharply today after the company announced it would acquire Dumarca Holdings Ltd., the Malta-based parent company of online casino player Vera&John group.
Intertain says it will pay up to $126.1-million for the company, and will make an initial payment of 44.5 million euros in cash and 36.5 million euros in common shares. The final payment price depends upon certain milestones related to the EBITDA that Vera&John may generate.
“Vera&John provides immediate accretion and meaningful operating cash flow to our business and gives us access to the growing Nordic markets,” said Intertain CEO John Kennedy FitzGerald. “Furthermore, Vera&John has developed and owns a fully-integrated, proprietary software offering, giving us future flexibility with respect to our business. Vera&John also has a mobile platform, including a leading mobile casino, with 35% of their expected 2014 sales being generated through this growing medium”.
Vera&John generated €4.6 million of EBITDA on revenue of €25.9 million in 2013, up 124% from the €11.6 million topline it reported in 2012. The company is particularly strong in the Nordic region, from which it generates 75% of its sales.
Intertain Group was spun out of TSX high-flier Amaya Gaming. Today’s pickup is the second significant acquisition for the company; in June, it reached an agreement to acquire Mandalay Media for approximately $82.4 million. Mandalay owned some of the U.K’s most popular bingo websites, including Costa Bingo, Sing Bingo, City Bingo, Fancy Bingo and Rio Bingo. In fiscal 2013, that company’s bingo business generated £16.1 million in revenue.
At press time, shares of Intertain Group were up 10.2% to $12.83.