The special purpose acquisition company Hydra Industries Acquisition Corp. announced on Thursday that it has entered the definitive purchase agreement phase of the takeover negotiations with the London-based Inspired Gaming Group and its subsidiaries and co-investors. The US company has been formed with the purpose of effecting exactly mergers, acquisitions and similar business combinations and is now entirely focused on finalising with the gaming supplier.
Inspired Gaming has been estimated to £200 million, including its indebtedness. Transaction expenses have been excluded from the valuation of the UK-based company. The same applies to the Hydra’s sponsor shares. As it became clear from the American company’s statement, the acquisition is to be subjected to certain adjustments before being finalised. Currently, Inspired Gaming is managed by the private equity firm Vitruvian Partners LLP.
As Hydra announced in its official statement, once the transaction deal is closed, the gaming supplier’s name is to be altered to Inspired Entertainment, Inc. and the company will still be listed on NASDAQ.
The equivalent price of the transaction is estimated to $264 million, taking into consideration the current exchanger rate of the USD and GBP currencies. The annual 2016 revenue and EBITDA that are to be officially announced in September are estimated to $110 million and $38 million, respectively, but an increase is also considered possible thanks to recurring revenue contracts’ backlog.
According to the announcement made by Hydra, the acquisition is expected to be finalised in October 2016. As soon as the deal is closed, the Chief Executive Officer of Hydra Lorne Weil is to assume the position of Executive Chairman at the acquired gaming provider. The current Chief Executive Officer of Inspired Gaming – Luke Alvarez – who is also the founder of the supplier, will retain his position and will become part of the company’s Board of Directors.
The transaction deal has already got the approval of both companies’ Boards of Directors, but it still needs to be approved by the US-based acquisition company’s shareholders, as well as by the regulatory bodies of both countries who will make sure all the conditions for finalising the deal are met.
The Chief Executive Officer of Hydra Lorne Weil commented on the transaction, explaining that the acquisition company had been searching for a business that would make a practical use of their skills to increase growth. Mr. Weil said they were excited by the opportunity to work together with such a great team and they were all aimed at not only growing Inspired Gaming’s business, but also use it as a catalyst for eventual further acquisitions.
Inspired Gaming’s CEO Luke Alvarez confirmed the deal, saying they were all very excited for the partnership with Hydra, which would give them access to public capital markets that would be a great opportunity for the London-based company.