Japanese gaming company, Sega Sammy Holdings, formed from the merger of Sega and Sammy Corporation, has entered into a definitive agreement to acquire GAN for approximately $107.6m (£87.7m/€100.8m). This acquisition will involve Sega Sammy paying $1.97 for each share in the online gambling solutions provider, representing a premium of 121% over GAN’s closing price on November 7th.

Sega Sammy intends to use this acquisition to expand its gaming business and portfolio. The company already operates an integrated resort through Paradise City in Japan and supplies gaming equipment and content through its Sega Sammy Creation (SCC) arm. The focus of this expansion will be on the US igaming market, where Sega Sammy has identified promising growth opportunities due to the increasing legalization of igaming in various states.

The deal will see GAN merging with SSC’s new special purpose company, making GAN the surviving corporation after the merger. However, the acquisition is still subject to approval from GAN shareholders, with a vote expected to take place no later than March 2024. If approved, Sega Sammy expects to close the acquisition before the end of 2024.

According to Sega Sammy, this acquisition aligns with its growth strategy and will contribute significantly to the expansion of its gaming business and portfolio. GAN’s chairman and interim CEO, Seamus McGill, views the all-cash offer as a value-maximizing path for shareholders.

The acquisition of GAN comes shortly after Sega Sammy completed another major deal in the gaming space, purchasing Rovio Entertainment, the developer behind the Angry Birds franchise, for a total of €706.0m. This latest acquisition underscores Sega Sammy’s aggressive expansion strategy in the gaming sector.

This acquisition follows a period of uncertainty for GAN, which had launched a strategic review in the first quarter to explore strategic alternatives to enhance shareholder value. The company also announced the exit of its long-serving CEO, Dermot Smurfit, and the appointment of Seamus McGill as interim CEO. As such, the acquisition by Sega Sammy represents a desired capital influx for GAN.

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