Intertain moves closer to acquiring Nordic-facing operator Vera&John

Canada’s Intertain Group has moved closer to acquiring Vera&John, entering into a share purchase agreement with the Nordic-facing online gaming operator’s parent company Dumarca Holdings.

The share purchase agreement follows the signing of a non-binding letter of intent in October, and will see Intertain acquire the entire issued share capital of Dumarca Holdings, the Malta-based parent company of Vera&John.

The acquisition will require an initial payment of €44.5m in cash, subject to certain net cash and working capital adjustments, and approximately 5m common shares of Intertain.

In addition, Intertain may be required to make a further cash payment in the event Vera&John generates earnings before interest, taxes, depreciation and amortization (EBITDA) over certain thresholds in 2015 and 2016. The cumulative earn out payment is subject to a cap of €8.1m.

The acquisition is subject to regulatory approvals and is expected to be completed within 30 days. Canaccord Genuity is acting as exclusive financial advisor for Intertain.

Meanwhile, Intertain was forced to comment on the recent trading activity of its shares, which fell by more than 26 per cent in Toronto on Friday following the raid by Canadian police and financial regulator Autorité des Marchés Financiers (AMF) on three Montreal offices as part of an investigation in the acquisition of PokerStars parent Rational Group by Amaya.

Amaya, which owns a 19.83 per cent stake in Intertain, said that it was cooperating with the AMF in its investigation into “trading activities in Amaya securities surrounding the Corporation's acquisition of Oldford Group in 2014”.

In a statement Friday, Intertain said that it became aware through news reports of the investigation by the AMF, but stated that it was not aware of any connection to Intertain of the investigation and that it had not been contacted by any security regulatory or law enforcement authority.

Shares in Intertain Group Limited (Co. Data) (TSX:IT) fell by 26.46 per cent to CAD$10.70 per share in Toronto Friday.