Quote:
Originally Posted by NerdSuperfly
this is strange imo ... the Amaya NYX deal included Amaya investing in NYX so i guess they could afford buying 'damaged goods', but who buys this struggling network, just do end business a few months afterwards, unless he has plans for the software (not sure if the 2b2 part of ongame has any player database, which is worth something). maybe strange is the wrong word, and "interesting" would be better .. idk
The deal was very convoluted. Part of the purpose appears to have been to mask Ongame's poor performance/loss-of-value under Amaya ownership & management (in my opinion).
-NYX got an option that it later exercised to buy Cryptologic for ~$150 million (including a 6-year lease-back to Amaya of the SW library, @ a minimum of $12 million/year for the 1st 3 years).
-Amaya loaned NYX $10 million that could be either be a normal loan, or converted into NYX stock (stock worth ~$5 million at the time), and
-NYX received Ongame, for a delayed cost of "8 times 2015 Ongame EBITDA". (Amaya had bought (a debt-free) Ongame 2 years before for 15 million Euros, plus up to 10 million Euros more based on US market penetration).
From the above it's hard to value what Ongame was really worth at the time of the sale by Amaya (even though it was clear the network was struggling). But as structured, people couldn't easily show an example of Amaya being bad at the poker operations business, which might impact future financing/deals they were hoping to make/renegotiate (i.e. even once they had acquired Stars and were in debt up to their eyeballs).
Well....according to more recent NYX filings, that 2015 EBITDA was
negative $11.1 million, which times 8 = $88.8 million (CAD).
One might assume there was little-to-no chance of that number being positive and that was assumed (?). Probably just means Amaya gets $0 as expected vs. paying NYX any money (otherwise NYX would be incentivized to tank Ongame on purpose).
Looks more and more like NYX agreed to take the sinking Ongame ship off of Amaya's hands, in return for the other favorable parts of the deal. Plus Amaya got some short-term cash in the Crypto sale + leaseback.