Newgioco set for $4.5m Virtual Generation acquisition
Italian gaming technology supplier Newgioco has entered into an agreement to acquire virtual sports specialist Virtual Generation (VG) for an initial $4.5m (£3.5m/€4m).
Newgioco will make the first payment in cash and stock, with its total outlay for the deal potentially rising to $5.06m, should sellers trigger an earn-out valued at $560,000, to be paid in stock, by increasing revenue by 5% in 2019.
Should the deal go though, Newgioco plans to introduce VG’s product line in Italy, where it is licensed as an iGaming technology supplier. VG is already active in Italy through an existing partnership.
Michele Ciavarella, chief executive of Newgioco, said the company also plans to use VG content to support its expansion plans in the US, as well in markets across Africa and Latin America.
“VG’s powerful platform, which has been running on Newgioco’s ELYS platform, allows for extensive customisation for country specific sports generation, providing a target rich environment for future applications in Latin American and African markets, as well as unique US tribal games tailored for the US tribal gaming market,” he said.
Founded in 2014, Virtual Generation works with both online and land-based B2B customers in 12 countries across Europe, Latin America and Africa. Last year, the company processed more than 20 million bet tickets via its platform.
VG’s current content portfolio includes virtual products for football, horse racing and greyhound racing, as well as keno and American roulette casino games.
Ciavarella said Newgioco expects the acquisition to be immediately accretive to the company in 2019. He added Newgioco should realise cost savings by using VG products in its land-based and online gaming operations in Italy, following certification by gaming regulators in the country.
The acquisition deal also includes the purchase of private holding company Naos Holding Limited. Neither Newgioco nor VG stated when they expect the deal to be finalised.