GVC Holdings Posts Strong Yearly Earnings Ahead of Bwin.party Acquisition

January 14th, 2016 | by Brian Corlisse
GVC Holdings bwin.party acquisition revenues

The deal between GVC Holdings and bwin.party is shaping up to a financially beneficial arrangement for the latter company. (Image: newsofgambling.com)

GVC Holdings has some good news for investors of bwin.party.

Earlier this week, GVC revealed that its net gaming revenues skyrocketed more than 10 percent in 2015, a total of €247.7 million ($268.4 million) received over the last 12 months.

That’s certainly a welcomed development for bwin.party shareholders as GVC is set to officially acquire the digital entertainment and online gaming business on February 1st.

GVC outbid 888 Holdings last September with a $1.7 billion offer for bwin.

“I am delighted to report yet another set of strong numbers,” GVC CEO Kenneth Alexander said in a statement. “We are enthusiastic to commence the integration of the businesses (bwin) and to continue to drive shareholder value for investors in the enlarged Group.”

Little Big Man

In terms of revenue, GVC is much smaller than its rival-turned-partner bwin.party. GVC’s $268 million in 2015 income is indeed a substantial figure, but it’s less than half of the $609 million bwin collected in 2014. Bwin has not yet released its earnings for 2015.

GVC Holdings consists of the Sportingbet, CasinoClub, and Betboo online properties. Bwin.party will provide the company with its first equity in the online poker market, and it’s a substantial one.

While bwin does operate a poker room on its website, it’s the Party Poker room that GVC has sought.  

PartyPoker is the seventh most active Internet poker platform in the world, and its France, Italy, and Spain domains all have notable traffic, according to PokerScout.com.

PartyPoker also operates in New Jersey through its partnership with the Borgata.

Combining the bases of GVC and bwin will give customers expanded gaming opportunities, and in theory, increased revenues for the conglomerate.  

Bwin Wins

Bwin might have been the bigger of the two companies, but it certainly wasn’t the most financially sound. Revenues for the gaming corporation headquartered in Gibraltar had fallen over recent years.

Year Net Revenue

2014 $609 million

2013 $660 million

2012 $833 million

2012 was the last year bwin.party experienced an increase in revenue. During the three-year period, investors on the London Stock Exchange unloaded shares based on disappointing earnings.

That led to bwin exploring options for a takeover, and now it’s paying off.

For each bwin.party share an investor held, they’ll receive roughly 36 cents and 0.231 new GVC shares. Not bad, considering bwin.party was barely more than a penny stock at the time, shares trading at around $1.44 when the deal was reached.

GVC is currently trading at about $7 per share. That means the newly issued GVC shares alone more than cover what the bwin.party investment was worth before the merger.

Bwin CEO Norbert Teufelberger, who will join the new company as a non-executive board member, and Chairman Philip Yea, are optimistic about the future.

“This has been a long and necessarily protracted process,” Yea said in September. Yea credited the “proven track record of GVC’s management team” as one of the leading factors in accepting the proposal.

Players who have complained about the drawn-out negotiations negatively affecting card room traffic have just two weeks now until the unification is formally complete.

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