SEGA SAMMY CREATION makes a play for GAN

The latest acquisition in the gambling industry is set to come from SEGA SAMMY CREATION’s corner, with the international conglomerate focusing on entertainment, gaming, and resort products now announcing a definitive Agreement and Plan of Merger with GAN, an established technological supplier of solutions for both the iGaming and sports betting verticals. The estimated value of the deal is $107.6m, still subject to approvals.

GAN’s chief region of operation is North America, which has brought many opportunities for interested businesses over the past several months, as sports betting and iGaming both continue to be fast expanding, with talks to legalize in South Carolina, Oklahoma, and especially Texas, and the now imminent launch of Florida.

The Merger Agreement outlined by the companies in an official statement specifies how the deal would move forward, with SEGA offering a 121% premium on GAN’s ordinary shares, based on prices on November 7, 2023, the last day of trading prior to the announcement.

GAN ordinary shares will be converted into the right to receive cash under the agreement, which will result in a payout of $1.97 per share, as SEGA seeks to hold a firm hand at the rudder right from the start.

GAN Interim CEO and Chairman Seamus McGill has welcomed this opportunity and given the company’s motivation behind its decision. McGill spoke about the challenges of navigating the iGaming B2C space, and cited a lack of sufficient capital to ensure that the business waits out certain regulatory developments. However, this was no reason to deject either.

"Sega Sammy has those resources and GAN is a strategic complement to their existing gaming portfolio. We believe this all-cash offer, at a substantial premium to recent trading prices, is the value-maximizing path for our shareholders," Seamus added, seeing in Sega Sammy a strong partner that would allow the GAN legacy to carry on under its own banner no less.

Of course, before the merger may move forward, there are a few customary procedures that must be met, including a vote by shareholders at the Special Meeting, which is still a moving target, but will be scheduled and held at some point before March 31, 2024. Gaming regulations and authorities will also have to weigh in.

Should all go according to plan, GAN will delist from publicly traded exchanges and become a fully owned subsidiary of Sega Sammy Corp. The deal is one of the most significant M&As of 2023.

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