UPDATE 1-Amaya Gaming to explore sale of Cadillac Jack subsidiary
(Adds details, background, CEO comment)
By Euan Rocha
TORONTO Oct 20 (Reuters) - Amaya Gaming Group Inc, which has pivoted to focus on the fast-growing online gambling market, said on Monday it is exploring a sale of its Cadillac Jack subsidiary that makes slot machines and electronic bingo games for casinos.
Earlier this summer, Montreal-based Amaya closed on the $4.9 billion takeover of Rational Group, operator of online gambling website PokerStars, just as several U.S. states have begun to move on legislation to legalize online gambling.
Amaya said its strategic review process will consider varied alternatives for the Cadillac Jack business with the main aim of expediting Cadillac Jack's growth and maximizing value for Amaya shareholders.
"In light of recent consolidation within the gaming machine supplier industry, we believe that this is an appropriate time to review and evaluate potential strategic alternatives for Cadillac Jack," said Amaya's Chief Executive David Baazov in a statement.
The gaming sector has been rife with consolidation over the last two years as a new generation of gamers has increasingly begun to bet online, leaving slot machine makers questioning their future and joining forces to strengthen their position.
In August, U.S. slot machine maker Scientific Games agreed to buy larger rival Bally Technologies Inc in a $3.27 billion deal. That deal came just a month after Italian gaming group GTech SpA said it would buy slot machine maker International Game Technology for $4.7 billion to strengthen its U.S. presence.
Those deals came after Scientific Games bought slot machines maker WMS Industries for $1.5 billion in 2013. Bally itself had acquired Israeli online casino company Dragonplay Ltd in June and casino equipment maker SHFL Entertainment in 2013. Continued...