In an all cash deal, Evolution will be paying $12 million, plus a possible further earn-out capped at $6 million. The transaction is expected to complete early 2019.
This is Evolution Gaming’s first competitor acquisition, with growth to date being completely organic. It will only add marginally to overall company revenue (2 to 4% in 2019), but is significant from a strategic point of view as presently Evolution and Ezugi are the only US market facing live game providers.
Evolution launched an Atlantic City dealer studio in August this year in addition to announcing that they will be streaming tables from the floors of a number of Atlantic City casinos including the Hardrock and Ocean Resort. Ezugi, in partnership with the Golden Nugget Casino became the first US based and licensed live dealer studio operation back in 2016.
Authentic Gaming’s Foxwoods Roulette is live streamed from US soil (albeit inside the Mashantucket Pequot Tribal Nation) but is not licensed to accept bets from US residents.
It will be interesting to see to what extent Ezugi live games are influenced by Evolution Gaming’s technology in months following the takeover.
PRESS RELEASE – Evolution Gaming, leading provider of Live Casino solutions, today announced that it has entered into an agreement to acquire the business of Ezugi, a live dealer gaming provider, in an all cash deal with an initial consideration of $12 million and possible additional consideration of a maximum of $6 million. The acquisition will increase Evolution’s geographic footprint and accelerate growth in key markets. It is expected to add 2-4% to 2019 revenues and be slightly accretive to Evolution earnings per share during 2019.
Currently operating from multiple studios worldwide, Ezugi delivers B2B mobile and web live dealer solutions to online operators, land-based casinos and betting shops. Its markets include the US states of New Jersey and Oklahoma, Europe, Latin America and South Africa.
The acquisition will accelerate Evolution’s growth through additional market shares, as well as product development and operational capability in existing Evolution markets such as Romania and the US. The announcement comes just three months after Evolution launched in the US online gambling market with its ninth studio worldwide, in Atlantic City, New Jersey.
At November 2018, Evolution and Ezugi are currently the only Live Casino providers operating in the US market.
Evolution’s CEO Martin Carlesund commented on today’s announcement,
“I am pleased about this agreement. It is a very logical next step for Evolution which will increase our market share in key existing markets, like the U.S, where Ezugi’s presence and customer base will add to our on-going market expansion as well as add licensees in new markets, such as South Africa.”
Evolution Chairman and founder Jens von Bahr added:
“This strategic deal will see Evolution increase its geographic footprint and accelerate growth. It will enable us to fast-track the accessibility to Evolution’s top-ranking software as well as to support continued industry leadership by adding well-established development teams and operational resources.”
Kfir Kugler, CEO and founder of Ezugi, said:
“Announcing this agreement gives me great satisfaction. Ezugi has come a long way since it was founded in 2012 and becoming part of Evolution marks the right next step for us. Evolution’s superior offering in areas such as streaming quality and speed, user experience, game choice and all-round operational excellence will help bring the service to the current Ezugi operators to the next level.”
Completion of the transaction is planned for early 2019 and is subject to certain closing conditions.