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JPJ Group Buys Gamesys

Irving Hayes - 24 Jun 2019

jpj groupLondon-listed JPJ Group Plc. recently announced that they would be acquiring outright their operating partner Gamesys Limited in a half a billion pound transaction. They stated they wanted to take advantage of Gamesys’s established brands, as well as stop relying on the services of third-party tech platforms, all in an effort to boost growth.

For the meagre price of £490 million JPJ Group will bag the Gamesys platforms in their entirety, plus operator brands Virgin Casino, Virgin Games, Monopoly Casino and Heart Bingo. Gamesys’ branded sports betting business Virgin Bet is not part of the deal, JPJ explained in his statement, and neither are the Livescore media and sports data business, nor any of their non-bingo games studios and supply operations.

JPJ said it had agreed to buy the bingo software developer for a sum of £250m in cash, and £33.7m in newly issued shares in the newly combined company. They will also pay a further £175 million towards the Group’s debt facilities.

The deal will see the developer’s debt markedly minimised, while boosting JPJ’s Holdings substantially. The shares are currently valued at £240m, based on the thirty-day volume weighted average price of 713 pence a share, they said.

Strategic Dealings

The foundations for this deal were laid back in 2015, with an earlier deal that took place, of a similar scale. Gamesys sold their holding JackpotJoy Brands to Intertain, an ex-Canadian group, for £430 million. Ultimately, Intertain migrated all its listings and holdings onto the London Stock Exchange, under the name JackpotJoy Plc, a new executive formed after the restructuring.

They later changed their name to JPJ Group.

In this new deal, JPJ went on, the newly combined company will be renamed Gamesys Group Plc., and is sure to qualify to be a part of FTSE mid cap index.

As of the end of the week, JPJ Group shares were already up 5.2% at 809 pence.

New Top Leadership Positions

There will be some restructuring as well among the senior executives of the 2 groups: Lee Fenton, CEO of Gamesys will be reappointed as Chief Executive of the newly-formed Group.

Mr Fenton called the transaction and subsequent creation of the new company strategically important, and went on to explain that the added scale and blended yet complementary capabilities would apportion them a combined and impressive brand portfolio, technological capabilities, an improved operating structure and an incomparable talent base.

Other members of the senior team include Keith Laslop as Group CFO and Robeson Reeves as Group COO, while Simon Wykes, current JPJ Chief Executive, will be handling the role of Transition Director for the newly- joined group, for the 12-month period following the deal.