SkyCity (ASX:SKC) expands partnership with Gaming Innovation Group

Posted on January 1, 2022 by Design in Design Innovation | 0 Comments

Highlights

SkyCity Entertainment Group Limited enters a binding term sheet contract with Gaming Innovation Group Inc (GIG).

SkyCity will shell out €25 million of new equity to help GIG in funding the acquisition of France-based Sportnco.

SkyCity Entertainment Group Limited (ASX: SKC) has entered into a binding term sheet contract with Gaming Innovation Group Inc (GIG), which expands its strategic partnership with the Company. As per the binding term sheet, €25 million is provided by SkyCity to fund the of Sportnco by GIG.

What do we know about GIG?

Europe based company – GIG provides media services and online gaming platforms. GIG is listed on the Oslo and Stockholm stock exchanges. Since the launch of SkyCity Online Casino in 2019, SkyCity is a strategic partner of GIG.

GIG to acquire 100% interest in Sportnco under the Sale and Purchase Agreement for €70 million. As per the contract, if specific profit targets are met, then earn-out payment will be done.

Equity funding of €25 million has been provided to GIG.
After the completion of the transaction, SkyCity will own approximately 11% of GIG’s issued capital.
After getting shareholder’s approval and board nomination, SkyCity representative will be joining GIG’s board.
The transaction will be completed after the completion of the Sportnco acquisition and subject to approval from shareholders of GIG.
It is expected that by Q1 FY2022, the transaction will be settled.

SKC shares are trading at AU$2.890 pe share, up 1.760% with a market capitalisation of AU$2.15 billion at 1:09 PM AEDT.

Bottom Line

With the acquisition of Sportnco business, GIG will be able to expand into growth markets such as Latin America, Canada and the US. By financing the acquisition, SkyCity can strengthen its relations with GIG along with representation in the GIG’s board.