On Thursday, Sportech announced it had sold its 50% stake in SNG to NYX for total consideration of £12m – £5.2m in cash, £5.2m in NYX shares (representing 6.1% of enlarged share capital) and up to £1.6m in deferred consideration. The deferred payments will be made in tranches of £520k for each new non-New Jersey client SNG inks over the next five years (to a maximum of three clients). Sportech estimates it will realize a pretax profit of £8.8m on the deal.
SNG made its first splash last year when the two JV partners inked a deal to supply Atlantic City’s Resorts Casino Hotel with an online casino platform. That platform went live in February in New Jersey’s regulated online gambling market. Resorts has a separate online poker deal with PokerStars (now owned by Canada’s Amaya Gaming) that is still awaiting regulatory approval.
Sportech CEO Ian Penrose said the deal provided “a significant return for the group in a short space of time.” The deal also allowed Sportech to “reinvest in our US growth activities in the sports gaming market, whilst retaining a material stake in the future of online casino gaming in North America.”
NYX REVENUE DOUBLES IN Q1
Meanwhile, the Toronto-listed NYX turned in its Q1 report card on Thursday, which showed revenue in the three months ending March 31 up 98% to C$9.9m, a new quarterly record. The company credited the gains to new customers, growth from existing customers and three months of revenue from the Ongame poker network, which NYX acquired from Amaya last November. Absent the Ongame contributions, revenue would have risen 79%.
Royalty and licensing revenue doubled to C$8m while social gaming revenue increased by 126.7% to C$1.6m. The social gaming division reported positive earnings for the first time thanks to the acquisition of two social games and efforts to trim expenses.
However, the company posted a net loss of C$5m, nearly five times the C$1.1m loss recorded in the same period last year. NYX blamed the downturn on Ongame’s losses of C$2.8m and fair value adjustment on its acquisition-related debt.
NYX CEO Matt Davey said he was pleased that his firm has “been able to carry forward our growth momentum from last year resulting in a strong start to 2015.” Davey expressed confidence that “our track record of operational and financial success will continue.”