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alaxy Gaming announced Monday that it has closed its acquisition of all of the equity interests in Progressive Games Partners (PGP), which owns the exclusive worldwide online rights to a comprehensive suite of proprietary casino table games, including Galaxy’s. The acquisition was first announced in February.
Based on the Isle of Man, PGP has been in the iGaming business since 2003 and has strong relationships with many of the leading iGaming providers. Las Vegas-based Galaxy said the transaction is strategically advantageous to the company as it increases its exposure to the iGaming market, which is forecasted to see significant growth, especially in the US.
The transaction also eliminates the distribution fee that Galaxy pays to PGP on Galaxy-owned games and gives Galaxy additional iGaming licensing revenue from several popular titles owned by other licensors. The company expects the transaction to be immediately accretive to earnings per share.
“The world has changed dramatically since we signed the purchase agreement for this deal back in February,” Todd Cravens, Galaxy’s President and CEO said in a press release. “Our casino clients in the physical world have been very hard-hit by the COVID-19 crisis and are generally struggling to get back to business levels they enjoyed before the lockdowns. By contrast, the iGaming business was a significant beneficiary of the shutdown, with US revenues in the second quarter of 2020 increasing 250% over the prior year.”
“We believe that more US states will consider legalizing iGaming as a way to prevent the tax revenue losses that occur when brick-and-mortar casinos are closed. We look forward to working more closely with our iGaming operators as we bring our existing library and our pipeline of new products online,” Cravens added.
“Galaxy has a great opportunity with the acquisition of PGP,” said Chris Reynolds, who has been PGP’s CEO since its inception. “Many of the titles that are in the PGP portfolio originated in the US land-based world. Since US iGaming operators will want to offer to their online patrons many of the same games that are popular in the physical world, there should be good adoption of the PGP content in the US. I look forward to working with Todd and the rest of the Galaxy team in serving the rapidly growing US iGaming market while maintaining the strong relationships we have in the UK and Europe.”
Galaxy will pay $12.425 million to acquire all of the equity interests in PGP, per the terms of the deal. Of that amount, at least $6.425 million but no more than $10.425 million will be paid in cash, and any amounts not paid in cash will be paid in newly issued shares of Galaxy’s common stock valued at $1.91 per share.
