Amaya to Sell Subsidiary Cadillac Jack

Amaya to Sell Subsidiary Cadillac Jack

Written by: Emilija Zivulovic on 31/03/2015 10:20

Amaya Gaming Group has announced an agreement to sell its Cadillac Jack subsidiary,reports Reuters,planning to use proceeds from the sale to lower debt. An affiliate of private equity firm Apollo Global Management will acquire Cadillac Jack for C$476 million ($375 million) and the deal is expected to close this year.

"We view the transaction as positive. Although at the bottom of our expected range," said Canaccord analyst Robert Young in a note to clients. Montreal-based Amaya wants to focus on the fast-growing online gambling market, back in October the group took over Rational Group, operator of online gambling website PokerStars for $4.9 billion.

Georgia-based Cadillac Jack produces slot machines and electronic bingo games for small to medium-sized casinos and bingo halls. Amaya acquired it in 2012 for about $177 million and has since then grown the business, developing some online versions of its popular slot machine games for online casinos.

Young said, however, that the sale of Cadillac Jack is likely to be dilutive for Amaya, which is set to report results early today. He estimates Cadillac Jack would have boosted Amaya revenue by C$115 million and its earnings before interest, taxes, depreciation and amortization by C$55 million in 2015.

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