The numbers behind Amaya's Rational Group deal

$4.9bn ““ The biggest deal in online gambling history

At $4.9bn, the acquisition arguably ranks as the biggest deal in online gambling history and turns Amaya Gaming Group into the largest publicly-listed company in online gaming. Amaya will take full ownership of the PokerStars and Full Tilt Poker brands which, with 85 million registered players across the world, are collectively the world’s largest poker network and now look like having a considerably better chance of entering the US poker market.

15 April 2011 ““ Black Friday puts the wheels in motion

15 April 2011 will be remembered as Black Friday and the date on which the US Department of Justice began its clamp down on unlawful gaming in the US. It will now also be seen as the date on which this deal began, as PokerStars looked for any which way to re-enter the potentially lucrative US online poker market. While that is still uncertain, the brand stands a far better chance under Amaya’s ownership than it did Mark Scheinberg’s, and the coming months are bound to see substantial lobbying on their behalf.

$500m ““ The price Amaya pays

Although the deal is valued at around $4.9bn just $500m of that will be paid by Amaya itself. The rest is being financed through various credit and equity facilities that have been agreed. Deutsche Bank, Barclays and Macquarie Capital will provide a $2bn first lien loan and a $100m revolving credit facility while also participating in an $800m second lien term loan alongside GSO, Blackstone’s credit business. $1bn has been raised through the issue of convertible shares priced at C$24 per share ““ representative of a 66.4% premium over the share price on 11 June – and an additional C$500m is to be raised through subscription receipts.

17% – Share price soars before suspension

Shares in Amaya Gaming Group soared more than 17% in morning trading yesterday before trading was suspended pending an announcement. The price reached more than C$14 having stood at around C$7.5 before the initial rumours began to surface. Shares in the group have increased by more than 120% over the course of the past year and represent a huge return for investors in the company.

$420m”“ Attractive EBITDA for any acquisition

The Rational Group had previously remained tightlipped with regard to its finances but disclosed its 2013 EBITDA to be $420m on revenues of $1.1bn, up almost 23% on 2012 EBITDA of £362m. This dwarves Amaya’s numbers, with the supplier recording revenues of C$41.2m and EBITDA of $14.86m in Q1 2014, and Amaya expects the deal to be immediately accretive to its earnings and cash flow.

11 ““ The multiple Amaya has agreed to

At $4.9bn, the deal puts the multiple Amaya has agreed to at around the 11x figure. That comes in at above industry average, but still in-line with the multiple paid by William Hill for Playtech’s share of the William Hill Online joint venture last year. At first glance the industry appears split on the deal’s value, with some having previously valued PokerStars at around $3bn and others suggesting that, despite the high multiple, the price paid is a fair one. Amaya CEO David Baazov agrees with the latter.

30 September 2014 ““ The closing date

While the acquisition has been agreed in principle, it is still subject to the approval of Amaya’s shareholders and customary closing conditions such as the receipt of all regulatory approvals from the Toronto Stock Exchange. Amaya expects the transaction to complete on or around 30 September 2014, leaving just over three months for the dust to settle and the online gaming sector to take stock of the enormity of the deal.