Inspired Gaming Group, the manufacturer of FOBTs and developer of virtual and slots games, is to be acquired by New York-based private equity firm Hydra Industries for a total valuation of £200 million.
The sale of Inspired assets has been negotiated with main investor Vitruvian Partners LLP and its co-investors in the enterprise. Deal stakeholders informed that the acquisition deal, which includes cash and shares, had been approved by the boards of Inspired and Hydra.
At present, Inspired’s fiscal year end is September 2016 and the corporate forecast estimates $110 million revenues with $38 million EBITDA.
Hydra stated that it would take on Inspired’s corporate debts, but would exclude transactional costs incurred by the deal. Inspired investors would be paid a combination of cash and Hydra issued shares at $10 per share dependent on the deal’s closing adjustments.
To complete its cash offering Hydra has received a $20 million private placement with Macquire Capital, with the additional funds being used from its $80 million cash-trust.
When completed Inspired investors will retain 35% of equity, with company credit lines expected to remain in place. Hydra informed investors, that its CEO Lorne Weil would become Inspired Gaming Executive Chairman, with Luke Alvarez retaining leadership of the company.
Weil commented on the acquisition: “We have been searching for a compelling business that utilizes our skill set to drive growth. We are excited to have the opportunity to partner with Luke and his team as we work together to grow the digital business through increased focus and the deployment of new technology and content.
“We look forward to not only growing Inspired’s business, but also using it as a platform for potential opportunistic acquisitions of synergistic businesses across its regions. We believe the combination of Inspired’s management team and our experience in utilizing technology and content to drive revenue growth in gaming markets makes us well-positioned to enhance value for our shareholders.”
Alvarez added: “We are excited to be partnering with Lorne Weil and Hydra while continuing our strong relationship with Vitruvian. Lorne’s history in the gaming industry and Hydra’s access to the public capital markets are the perfect combination to take Inspired to the next level. Our ambition with Inspired has always been to build a truly scaled and global leader in gaming technology, which we believe is transitioning rapidly to an all-digital environment. Our visions are aligned, and the Inspired team is looking forward to working with Hydra to drive value through organic and strategic growth.”
Philip Russmeyer, Senior Partner at Vitruvian, commented: “We have enjoyed a strong and productive partnership with the management team at Inspired and are delighted to support this transaction, which will facilitate access to capital markets and support the company in the continued build-out of its market-leading positions.”