In March 2011, industry-leading online gaming software provided Cryptologic released its annual financial results. Shortly after, the organization hired Deloitte to conduct a strategic review of the company. Cryptologic indicated that this review could ultimately lead to the sale of the business, however, no discussions or agreements were currently underway.
Amaya Purchasing a 5 Percent Stake
Following this announcement was unconfirmed news that Amaya had acquired a 5 percent stake in Cryptologic prior to an acquisition bid. Based out of Canada, Amaya is an online gaming company that is active in the Kenyan market. Amaya recently acquired an online gaming license from the Dominican Republic jurisdiction and is planning to launch an online gaming site featuring a variety of casino games in the third quarter of 2011.
The Filing of an SC13D Notification
This unconfirmed news was finally confirmed the week of April 11th when Amaya notified the stock exchange of this strategic move. On April 15th, 2011 Amaya filed an SC13D notification which is a report of the acquisition of 5 percent ownership of a company. Amaya purchased 652, 170 shares of Cryptologic for slightly over 1 million USD. This is typically the beginning phase of an acquisition.
click here to see most Popular PagesThe Chief Executive and President of Amaya filed the statement to the stock exchange. The shares of Cryptologic were purchased between March 25th, 2011 and April 7th, 2011 at an average price of $1.65. The stock was purchased to facilitate a possible strategic transaction with Cryptologic. The executive further stated in the notification that Amaya is keeping all options open and will continue to monitor business performance and activity.
Playtech’s Purchasing Rampage
At the same time, Cryptologic’s largest competitor, Playtech, is on a purchasing rampage. The latest company in their scope is London-based online gaming provider, Ash Gaming. Media reports that Playtech is on the brink of an acquisition. This purchase is a strategy move to complement Gaming Technology Solution’s (also acquired by Playtech) EdGE platform which is currently used with several of Ash Gaming’s top games.
The acquisition of Cryptologic could be excellent for specific entities in the online gambling industry, especially Playtech and other online software developers. Since Cryptologic, Microgaming and Playtech are constantly competing to be the most popular developer, removing Cryptologic from the race could significantly improve the other two company’s profits depending on the direction Amaya plans to take the company.
