Amaya Gaming Group is to sell WagerLogic, one of the online subsidiaries it acquired as part of the Cryptologic purchase, to Goldstar for US$70m.
Having relatively recently bought Cadillac Jack and the Ongame poker network and seen second quarter net loss of $11.4m, analysts believe an offloading of some of its assets was on the cards.
WagerLogic was bought by Amaya in April 2012 when it paid $35m for WagerLogic’s parent company, CryptoLogic Limited.
WagerLogic’s Business had revenue for the year ending December 31, 2012 and 2011 of US $17.2m and US $26.1m and net income of US $5.8m and US $13.4m, respectively.
David Baazov, CEO of Amaya Gaming, said: “The proposed sale of these business-to-consumer assets is consistent with our strategy of focusing primarily on being a single source business-to-business supplier of diversified gaming solutions to gaming operators. We anticipate this divestiture will allow us to expand our existing relationships and cultivate new ones with online gaming operators.”
The deal will see Aumento Capital II Corporation, a Capital Pool Company, enter into a letter of intent with Goldstar Acquisitionco to complete a business combination whereby all of the issued and outstanding securities of Goldstar will be exchanged for securities of Aumento.
Immediately preceding the Amalgamation, Goldstar, pursuant to the terms of a share purchase agreement dated October 18, 2013 intends to complete the purchase from a subsidiary of Amaya Gaming Group, an entertainment solutions provider for the regulated gaming industry, of all of the outstanding shares of online casino operator WagerLogic Malta Holdings for cash consideration of $70m. Closing of the purchase is anticipated on or about December 31, 2013.
The Share Purchase includes an earn out agreement pursuant to which the vendor thereunder may receive additional cash consideration payable on the second and third anniversary date from Closing based on the achievement of certain revenue targets, as well as a minimum revenue guarantee agreement pursuant to which the vendor, in the first two years following the Closing, may pay Goldstar cash consideration if certain revenue targets, approximately in line with recent audited revenues, are not achieved. Following Closing, subsidiaries of Amaya would continue to supply WagerLogic with software, services and content to power its online casino operations, pursuant to a services agreement.