BUSINESS

Amaya eyes DraftDay acquisition, scales back Innova Group IPO plans

TAGs: Amaya Gaming, daily fantasy sports, diamond game enterprises, draftday, innova group

amaya-draftday-talking-acquisitionCanadian online gambling operator Amaya Gaming is reportedly interested in acquiring daily fantasy sports (DFS) operator DraftDay.

Earlier this month, MGT Capital Investments, which acquired DraftDay in April 2014 for around $600k plus stock options, revealed that it was looking to sell its new toy to take advantage of the current media frenzy around the DFS space. On Wednesday, eGR North America reported that Amaya was among the suitors kicking DraftDay’s tires.

DraftDay is among the also-rans – including FantasyAces and Victiv – vying for the #3 DFS operator ranking behind FanDuel and DraftKings. MGT is believed to be seeking up to $10m for DraftDay and MGT also wants to hold on to a 20% stake in the operation.

Last month, Amaya announced that it planned to have its own DFS offering in place in time for the new NFL season this September. Amaya said it was pursuing a dual strategy of both internal development and strategic acquisition, although it couldn’t help humble-bragging that it doubted there was a DFS platform on the market that could handle the volume of Amaya’s flagship PokerStars operation.

AMAYA SCALES BACK INNOVA IPO
Meanwhile, Amaya has scaled back its plan to float its Diamond Game Enterprises lottery subsidiary. In March, Amaya announced it would spin off Diamond Game into Innova Gaming Group, a new division that would launch an initial public offering on the Toronto Stock Exchange. The spinoff was part of Amaya’s strategy of divesting itself of its B2B assets to focus on its new B2C Rational Group assets.

On Wednesday, Amaya announced Innova shares would be priced at C$4, below the targeted range of C$4.50 to C$5. Amaya has also increased the percentage of Innova it intends to retain from 33% to 40%. Innova will reap C$15m from the IPO while Amaya, which is selling some of its stake in a secondary offering, will take home C$34m.

Regardless of the haircut, Amaya will realize a tidy profit from the spinoff, given that it paid US $25m (C$30m) for Diamond Game nearly two years ago. That’s less than Amaya’s remaining stake in Innova, which will be worth around C$33m at the IPO price.

Amaya’s B2B divestiture has proceeded with remarkable speed since the strategy was announced in January. In March, Amaya sold its land-based gaming machine division Cadillac Jack to American Gaming Systems for C$461m and a $15m interest-bearing note. Earlier this month, Amaya sold its Chartwell and Cryptologic online gambling software divisions for C$150m to NYX Gaming Group, which had previously purchased Amaya’s Ongame poker network.

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