Zynga IPO reaps $1b; Amaya to buy CryptoLogic; GTECH’s Hungary lotto deal

Peter Amsel
December 16, 2011
5 Comments

zynga-ipo-amaya-cryptologicSocial games developer Zynga will reap a cool $1b via its initial public offering after pricing the 100m shares up for grabs at $10, the top end of the range. Zynga’s payday makes it the largest US tech firm IPO since Google raised $1.9b in 2004. The IPO equals 11% of diluted shares, valuing Zynga at a staggering $8.9b, which isn’t bad for a company that doesn’t (yet) generate all that much profit (partly because Facebook takes a 30% cut off the top).

Some analysts are pooh-poohing the valuation, noting that Zynga relies on the tiny fraction of its mammoth user base that actually buys virtual goods, and Zynga’s newest games haven’t had the impact of its early successes. Then again, it is planning a whole suite of casino games and not everyone is buying the company line that they’re not interested in crossing over into real-money online poker if/when the US regulates. Regardless, CEO Mark Pincus – not to mention Morgan Stanley and Goldman Sachs, the investment bankers who brought Zynga to market – have made out like virtual bandits.

Irish-based online gaming software developer CryptoLogic Ltd. has agreed in principle to an all-cash acquisition bid by Canadian gaming software outfit Amaya Gaming Group. Amaya, which already holds a 7.5% stake in CryptoLogic, will reportedly offer $2.50 per share, a 52% premium on CryptoLogic’s $1.64 Wednesday close on the Nasdaq exchange. CryptoLogic has had a rough ride of late, subjecting itself to a strategic review by Deloitte and only recently returning to profitability. The deal is subject to certain conditions, not the least of which is Amaya proving it has the cash. Amaya will also have to formally announce its intention to buy by Jan. 12, 2012, but in the meantime, the agreement in principle allows it to conduct confirmatory due diligence. Turn your head and cough, Crypto…

William Hill has already got what it wants for Christmas: a new media planning and buying partner. After former handlers the7stars declined to renew their deal, Hills has inked a new £15m pact with Aegis agency Vizeum, which beat back competition from WPP’s MEC And Omnicom Group’s Manning Gottlieb OMD.

GTECH G2 has inked a six-year deal with unpronounceable Hungarian National Lottery operator Szerencsejatek Zrt. The lottery has the country’s exclusive rights for lotto-style games, scratch tickets and sports betting products. Under the deal terms, GTECH will provide Szerencsejatek Zrt with its sports betting platform Margin Maker, as well as its Gaming Management System, which will allow the Hungarians to view their players activity across any gaming product.

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Tags: amaya gaming group, Article, Cryptologic, GTECH G2, Hungary, William Hill, Zynga
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