Toronto-listed gaming software provider Amaya Gaming Group has finalised its acquisition of the California-based lottery technology supplier Diamond Game Enterprises.
Amaya has completed the deal for a total purchase price of US$25m, subject to post-closing purchase price adjustments. The supplier paid $18m in cash, with a further $7m held back for certain contingent liabilities and other items.
The deal allows Amaya to integrate its games library with Diamond Game’s lottery technology, expanding the reach of both companies in the lottery and casino markets.
Diamond Game operates around 2,000 machines in 100 locations across ten jurisdictions, offering over 60 games. It is licensed in ten states and provinces, and approved by more than 20 Native American jurisdictions.
The supplier has two primary business units; its casino products division developing products for video lottery terminal, Class II bingo, Class III commercial casino and racetrack markets; and the lottery products division developing scratchcards, and the LT-3 instant ticket vending system.
Diamond Game generated revenue of $17.8m and earnings before interest, tax, depreciation and amortisation (EBITDA) of $3.9m in 2012. The majority of revenue is recurring, and generated form fixed-fee or revenue share agreements in place for its gaming machine estate.
Amaya chief executive David Baazov said he was pleased to have acquired Diamond Game, describing the company as an innovative business.
He highlighted the expansion of the LT-3 product as a key driver of future growth predicting that this would continue in coming year, with more machines rolled out in new jurisdictions.
“Additionally, we plan to leverage our network of relationships to provide new revenue opportunities forDiamond Game while leveraging Diamond Game's US lottery relationships to potentially expand deployment of Amaya's gaming solutions,” he added. “We anticipate this acquisition will be immediately accretive to adjusted EBITDA.”
Shares in Amaya Gaming Group Inc (Co. Data) (TSX:AYA) closed at CA$8.31 per share in Toronto Friday.