Sega Sammy Holdings has reached an agreement to acquire Stakelogic, an Eindhoven, Netherlands-based online gambling company. The move will set Sega back around $141 million, thus being one of the largest M&A deals in its history.

Stakelogic runs a B2B-oriented online gambling platform, essentially offering a backbone for a variety of digital casinos. Since its founding in 2014, the Dutch company has expanded to over 20 markets and currently employs more than 550 staffers across seven offices.

Sega has now opted to acquire Stakelogic, having confirmed as much in a July 26 notice to investors. The Japanese gaming giant characterized the deal as part of an ongoing effort to bolster its gambling operations. While Sega already runs a successful pachinko business, that branch of the company is predominantly domestic and non-digital. In contrast, the Stakelogic deal is meant to help it capture a share of the lucrative sports betting and online casino market in the United States, which is currently estimated to generate $16.5 billion in annual revenue.

That valuation is driven by only seven U.S. states in which online betting, or iGaming, is presently legal. Stakelogic currently has a license to operate in three of them: Rhode Island, Pennsylvania, and Michigan. The Dutch company also has plans to expand to even more states, with Sega thus hoping that this deal will help it capture a sizable share of the growing U.S. iGaming market. The acquisition is valued at approximately €130 million ($141.33 million), which is roughly 8.5 times Stakelogic's annual revenue. The final sale price will be adjusted based on the Dutch group's working capital, net debt, and other factors that are yet to be disclosed.

But the deal's starting valuation is already well above all of the company's past M&A moves, except for Sega's 2023 acquisition of Rovio, which was priced at approximately $776 million. Stakelogic is also the first non-video game developer that Sega has acquired in nearly two decades. Its first and only previous purchase of this kind was that of entertainment center GameWorks, which was completed in May 2005. As for the deal at hand, the Stakelogic acquisition is planned to be wrapped up during the first quarter of Sega's next fiscal year, i.e., between April and June 2025. The deal will mark Sega's 11th acquisition to date.

The iGaming sector isn't the only industry that the Japanese group is currently pursuing with the goal of diversifying its operations. To that end, Sega has lately also been investing in movie and TV adaptations of its popular IPs, though most of those projects have yet to see the light of day.

Posted: Aug 01, 2024 11:14 pm
Related Forum: Gaming Discussion

Source: https://gamerant.com/sega-sammy-holdings-stakelogic-acquisition-announcement/